Frank targets financial rules 'escape hatch' banks

WASHINGTON, July 27 (Reuters) - Banks in nations that offer an "escape hatch" to stricter financial regulations should be barred from the U.S. payment system, said the chairman of a key congressional committee on Monday.

"If the secretary of treasury cannot certify that you are cooperative with regulation, then none of your banks can be in the American payment system, none of them can get cleared through the Federal Reserve," Representative Barney Frank told reporters after making a speech on regulatory reform.

Frank, chairman of the House Financial Services Committee, said he has discussed this idea with Treasury Secretary Timothy Geithner. "I think he thinks it's a good idea," said Frank, a leader among congressional Democrats supporting efforts to tighten regulation of banks and capital markets.

"I've had this explicit conversation with Joaquin Almunia, monetary affairs commissioner of the EU, Charlie McCreevy of the EU. I've had it with Francois Fillon, prime minister of France. I've had it with the Canadian Parliamentary Committee in charge ... There's just overwhelming agreement that this is going to be done in a multinational, coordinated way," he said. (Reporting by Kevin Drawbaugh; Editing by Kenneth Barry)