WASHINGTON — An obscure provision in the regulatory reform bill adopted by the House has become a flash point in the fight over whether the legislation should spell out rules for regulators or give them wide flexibility.
The provision, authored by Rep. Jackie Speier, would limit a systemically important firm's debt to 15 times its equity. The California Democrat argued that a simple standard is necessary because regulators have failed to adequately use their authority to curb risk-taking by financial firms.
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