Congress to rush through powers to control and unwind AIG
The White House and Congress are to write legislation to allow the federal government to take over and unwind the businesses of a large financial institution, such as AIG, the way it now can with commercial banks, CNBC has reported.
It said powers similar to the FDIC’s so-called bridge bank powers are being drawn up as stand-alone legislation because of the scandal over AIG executive bonuses.
It is being spearheaded by House Financial Services Chairman Barney Frank and could be ready before Congress’ spring recess in April. A public hearing is also expected.
“The President has asked us to fast-track,” said the CNBC source. “Drafting is going on at both ends of Pennsylvania Avenue.”
President Obama has already referred to the need to “get a proper mechanism in place”.
“What we are working on is a resolution authority that would be similar—not identical, but similar to the powers that the FDIC currently has over banks,” the President said in his comments about the AIG uproar.
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