Funds News

UPDATE 1-Geithner nonbank plan a power grab:House's Boehner

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WASHINGTON, March 24 (Reuters) - U.S. Treasury Secretary Timothy Geithner’s request for government authority to wind down failing non-bank financial firms is an unprecedented power grab, House Minority Leader John Boehner said on Tuesday.

“This is an unprecedented grab of power, and before that occurs, there ought to be a real debate about whether we should give that authority to the Treasury Secretary,” Boehner, an Ohio Republican, told reporters. There were many unanswered questions, he said, but stopped short of saying flatly that he would oppose the plan.

Geithner on Tuesday joined the Federal Reserve in calling for authority to wind down failing non-bank financial firms that threaten the financial system. He pointed to American International Group as an example of a non-bank institution that can pose systemic risks.

Geithner, in testimony to a House committee, said Congress should approve legislation giving the government the ability to step in to put a major institution under conservatorship and avoid a damaging bankruptcy.

But Boehner said that he was “a little concerned” about the idea of giving Treasury even more power, “with everything that is going on, in terms of the government involvement in the private sector.”

“You need to look at insurance operations as an example, that are regulated by states. What interest would the Treasury secretary have here, and why would he want this power?” Boehner asked after a meeting with other House Republicans.