Trying to understand last weekend’s crisis with Bear Stearns is the kind of thing that just makes my eyes glaze over. I am virtually illiterate when it comes to such matters. But the whole thing did ring a bell to me, being old enough to remember the savings and loan crisis of of the Reagan years. And the plot sounds kind of the same to me: Republican administration unfriendly to regulation of financial services. Excessive greed and lack of adequate regulation spurs previously staid financial industry types to engage in reckless practices resulting in catastrophic collapse and need for government (IE: taxpayer) bailout. Am I wrong?

The Bear Stearns situation had to be pretty scary to get the Feds to intervene so quickly and dramatically over the weekend. It leaves laymen like me feeling a bit jittery wondering when the next shoe is going to drop. It doesn’t help that commentators are beginning to talk about recession as if it has actually arrived and some daring even to bring up the D word.

In light of the Bear Stearns catastrophe, Representative Barney Frank, Chairman of the House Financial Services Committee, proposed making significant changes in financial services regulation including the establishment of a “Risk Regulator” (possibly the Federal Reserve) with power to assess and intervene regarding risk across financial markets of all kinds. Its regulatory powers would not be limited only to certain types of corporations such as commercial banks vs investment banks vs other kinds of lenders, as is now the case with regulatory agencies, and would be more responsive to risk associated with newly evolving forms of financial services and funds. Frank also suggested new government interventions to ease the foreclosure crisis.

Enter Peter Roskam. Our Congressman is a member of the very same Financial Services Committee, whose job it is to oversee all components of the nation’s housing and financial services sectors including banking, insurance, real estate, public and assisted housing, and securities. He serves on the subcommittees responsible for capital markets and for oversight and investigations. Seems like Roskam is going to be close to the center of this discussion on regulation.

Peter Roskam says that he wants to be our “voice in Congress”. It will be interesting to observe just whose voice he really is during the upcoming deliberation. Is he going to vote in the interests of us ordinary folks who reside in his district? Or is he going to work on behalf of those who are bankrolling his re-election bid, folks like:

• American Bankers Association PAC
• Bank of America PAC
• Capital One Financial Political Fund
• Chicago Board of Options Exchange PAC
• Citigroup, Inc. PAC
• Consumer Bankers Association PAC
• Federal National Mortgage Association PAC
• Financial Services Institute PAC
• Goldman Sachs Group, Inc. PAC
• J.P. Morgan Chase & Co. PAC
• LaSalle Bank Corporation Federal PAC
• Morgan Stanley PAC
• Mortgage Bankers Association PAC
• National Venture Capital Association PAC
• New Century Financial Corporation PAC
• New York Stock Exchange, Inc. PAC
• Securities Industry and Financial Markets PAC
• Washington Mutual PAC 

I don’t know the answer, but stay tuned.