House Panel OKs Sweeping Changes in Bond Rules
In response to last summer’s Salomon Bros. government bond trading scandal, a House panel cleared legislation Tuesday to revamp the $2.3-trillion market that finances the national debt.
The bill that the Energy and Commerce Committee sent to the full House would beef up federal regulation of the government securities market and require better record-keeping by traders, who would also have to make prices and other trading information more accessible to the public.
In effect, the bill would apply regulations now governing corporate securities to the loosely regulated market in government bonds, notes and bills.
The bill cleared the committee with bipartisan support despite objections from the Bush Administration that the costs outweighed the benefits.
Treasury auctions help finance the government debt and influence the interest rates companies and individuals must pay when they borrow.
Last August, Salomon admitted numerous violations of the auction rules.
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