Lawmakers plot finance shake-up

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Lawmakers plot finance shake-up

more: http://www.ft.com/cms/s/0/7eb59224-4342-11de-b793-00144feabdc0.htmlhttp://www.ft.com/cms/s/0/7eb59224-4342-11de-b793-00144feabdc0.html

By Tom Braithwaite, Sarah O'Connor and Krishna Guha in,Washington

Published: May 18 2009 03:00 | Last updated: May 18 2009 03:00

Congress will next month start the biggest regulatory overhaul of the US financial system in decades, bringing into the open a frantic lobbying effort between banks, regulators and policymakers on what it contains and who pays for it.

The House financial services committee, chaired by Barney Frank, the Massachusetts Democrat, will hold hearings early in June on reforms outlined by Tim Geithner, Treasury secretary, according to people familiar with the timetable.

But the complexity, coupled with a crowded legislative agenda, means one key pillar - a resolution authority allowing a regulator to seize a failing bank holding company - is unlikely to be set up until the year end.

The cost of the authority and a proposed systemic risk regulator could be borne by both large banks and small, according to people involved, in spite of entreaties from the hundreds of small US institutions that they should not pay a levy.