US House panel backs $150-bln dissolution fund

WASHINGTON Thu Nov 19, 2009 5:24pm EST

WASHINGTON Nov 19 (Reuters) - The U.S. House Financial Services Committee on Thursday approved a measure that would set up a $150-billion "systemic dissolution fund" to finance the unwinding of troubled financial firms.

The Federal Deposit Insurance Corp would handle the unwindings. The fund would get money from fees charged to financial firms with more than $50 billion in assets, under the bill as amended in a committee working session.

The measure was added to a wider bill on systemic risk. An earlier version had called for assessing a broader base of firms, targeting those with assets of more than $10 billion.

But the base was narrowed by an amendment from Democratic Representative Brad Sherman that was approved by a 52-17 vote.

The wider bill, under development for months, had been slated for a final vote by the committee on Thursday. But that vote was delayed until after the Thanksgiving holiday. (Reporting by Kevin Drawbaugh)