Republicans Circulate Draft of Financial Regulation Alternative

Damian Paletta at the Wall Street Journal offers a summary of a 20 page draft of a GOP alternative approach to financial regulation. Overall it’s extremely vague, but appears to be . . . staggeringly similar to what’s already in Chris Dodd’s bill. They get rid of the ex ante resolution fund (which brings the GOP in line with the Obama administration’s preferences) but the resolution process is exactly the same. The derivatives piece sounds the same as what Dodd initially proposed, but scraps Blanche Lincoln’s swap desk spinoff idea.

It also does . . . something . . . on Fannie Mae and Freddie Mac but it’s impossible to tell what: “The Republican plan would create federal funding limits and mandatory portfolio reductions for the companies. It will also restrict the amount of money the government can advance the firms.” Would be nice to know what the limits are, what the portfolio reductions are, etc. In principle, misguided conservative passion about the Government Sponsored Entities could play a constructive role in this debate since congressional Democrats are possessed of a misguided lassitude about the issue.