Chicago — Just as the implosions of Enron and WorldCom helped ease the way for the Sarbanes-Oxley Act of 2002, the news that the Federal Reserve is stepping in to save beleaguered American International Group (AIG) may have reverberations far beyond the company involved.
Indeed, new regulations that impact the financial services industry in general and the insurance industry in particular may be in the offing. House Financial Service Committee Chairman Barney Frank seemed to indicate as much in comments made on CNBC, saying “increased regulation” was necessary. Frank also has floated the idea of establishing a taxpayer-financed body like the Resolution Trust Corp., which liquidated failed savings and loans in the 1980s, might be needed in coming months to stabilize markets and prevent more implosions at major financial institutions.
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