–Fed’s Bernanke, Tsy’s Geithner To Go Before House Panel Tuesday AM
–Senate Banking Chairman Dodd Sees Regulatory Debate Wednesday or Thurs
–Senate Banking Subcommittee To Hold Hearing On China Forex Policy
–Senate Finance Panel To Examine Proposed Fee on TARP

By John Shaw

WASHINGTON (MNI) – Federal Reserve Board Chairman Ben Bernanke and
Treasury Secretary Tim Geithner will testify Tuesday before the House
Financial Services Committee on a report issued by an examiner of the
bankruptcy of Lehman Brothers.

The hearing will begin at 11 a.m. and Bernanke and Geithner are set
to testify on the second panel.

The first panel will be comprised of two lawmakers and should be
relatively brief.

The hearing will focus on the report which concluded that Lehman
Brothers used aggressive accounting devices — the so-called repo 105
technique — to take billions of dollars off its balance sheet before it
imploded in September of 2008.

Richard Fuld, the former chairman of Lehman Brothers, will testify
as will Anton Valukas, the court appointed examiner of the Lehman
bankruptcy.

The main drama on Capitol Hill this week will focus on the effort
by Senate Banking Committee Chairman Chris Dodd to begin Senate debate
on his financial regulatory reform bill.

Dodd said at a Monday briefing that he hopes to begin the debate
Wednesday or Thursday, but he and other Democratic leaders face a
Republican threat to filibuster any attempt to begin the debate.

Dodd said he has been in talks with Republicans for months on
financial regulatory reform and is willing to continue discussions to
craft a bill that can attract “broad” support.

“The door is wide open — as it has been,” Dodd said.

All 41 Senate Republicans sent a letter to Senate Majority
Leader Harry Reid last week saying they oppose the Dodd bill and will
resist any attempt to begin the Senate debate.

Democratic leaders are likely to make a motion to begin debating the
bill Wednesday or Thursday. It is unclear if all Republicans are
prepared to vote to prevent even a floor debate.

The Senate Banking Committee approved Dodd’s regulatory reform bill
on March 22 on a party-line 13 to 10 vote. All Democrats supported the
bill and all Republicans opposed it.

Dodd’s legislation establishes a new independent Consumer
Protection Bureau at the Federal Reserve Board, creates a process to
liquidate failed financial firms, sets up a council of regulators to
oversee systemic risk in the economy, establishes a regulatory structure
for over-the-counter derivatives, requires hedge funds that manage over
$100 million to register with the SEC and creates a new office within
Treasury to monitor the insurance industry.

Reid has said he wants the Senate to pass a regulatory reform bill
by the end of May.

President Obama has said that financial regulatory reform is one of
his central goals for the rest of this legislative session.

In other action this week, a subcommittee of the Senate Banking
Committee will hold a hearing Wednesday at 10 a.m. on China’s exchange
rate policy.

The panel will hear from a representative of a manufacturing firm
and several think tank analysts.

The Senate Finance Committee will hold a hearing Tuesday at 10 a.m.
on the administration’s proposal to levy a fee on firms using TARP
funds. Neil Barofsky, the inspector general for TARP, will testify.

Finally, Senate Budget Committee Chairman Kent Conrad and House
Budget Committee Chairman John Spratt are expected to intensify work
this week on drafting a budget resolution for fiscal year 2011. That
resolution would set broad spending and revenue goals and make deficit
estimates.

Budget law requires that Congress pass budget resolutions by April
15, but this often does not happen.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$]