Tags: US | Financial | Overhaul

House Drops $150 Billion Fund Idea for Troubled Firms

Wednesday, 23 Jun 2010 11:55 AM

House negotiators on legislation providing an overhaul of the financial system have agreed to drop their demand for a $150 billion fund to cover costs of liquidating large, failing institutions.

Eliminating the fund was one of the central demands of key Senate Republicans, such as Sen. Olympia Snowe of Maine, to maintain support for the bill.

The House version would have required large banks to pay a fee to finance the $150 billion liquidation pool. The Senate bill did not.

The new House proposal still calls for a liquidation fund of an unspecified sum. It does not impose a fee on banks, however.

The House offer may still not satisfy Republicans who worry that the mere existence of a fund could prompt risky behavior by financial institutions.

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