Bailout Bill Mandates Report to Congress on Reforming Financial Regulation

One of the more forward looking and possibly mementous provisions in the Emergency Economic Stabilization Act is one mandating a report to Congress on modernizing financial regulation. The report is be delivered by the Treasury Secretary, who earlier this year published a comprehensive blueprint for reform. The report must be submitted by April 30, 2009, after the Secretary conducts an exhaustive review of the financial markets and the regulation of them.

The Secretary is specifically ordered to analysis the over the counter swaps market and the government sponsored enterprises. In addition, the Secretary must recommend whether any currently unregulated market participants, such as hedge funds, should become subject to federal regulation. The Secretary must also submit recommendations on how to enhance the clearing and settlement of over-the-counter swaps.