By John Shaw

WASHINGTON (MNI) - As House Financial Services Committee Chairman Barney Frank prepares next week to make the final push to complete his financial regulatory reform bill, Senate Banking Committee Chairman Chris Dodd is preparing to launch his effort to pass a comprehensive bill in his panel.

Frank's committee has been working for more than a month on passing individual regulatory reform bills, with the expectation that these various bills will be placed before the House in early December as one comprehensive package.

Frank's panel reconvenes Tuesday morning to work on the final major part of his plan: creating legislation to limit systemic risks to the financial markets and overall economy.

Frank's committee still must fine-tune other parts of the package that were worked on earlier, including regulation of over-the-counter-derivatives. But its seems likely that the full House will take up financial regulatory reform early next month.

For Dodd, the long arduous process of creating -- and then passing

meetings with Democratic members of his panel as well as Sen. Richard Shelby, the ranking Republican on the Banking Committee.

Shelby eventually left the talks, indicating that he is not comfortable with key elements of Dodd's plan.

Dodd released what he called a discussion draft Tuesday and his panel is expected to formally begin considering the package next Thursday, Nov. 19.

But the first day of the Senate Banking Committee mark-up is expected to be devoted only for opening statements. The Banking Committee will begin considering amendments during a session on Dec. 2.

It now seems clear that the full Senate will not take up financial regulatory reform until next year, assuming that Dodd can win approval of his bill by the Banking Committee in December.

At a briefing Tuesday, Dodd said he is proposing "sweeping and long overdue comprehensive financial reform legislation" which will, among other things, return the Federal Reserve Board to the traditional role of a central bank.

"This is a very thorough and carefully considered plan," Dodd said, adding that it will lead to "real and meaningful change" in financial regulation.

Dodd said that one of his central goals in the bill is to get the Fed to return to its traditional focus on monetary policy and assessing financial stability in the overall system.

The Fed should "get back to its core enterprises" and leave areas such as consumer protection to others, Dodd said.

Dodd's bill would create a new consumer financial protection agency, establish a disciplined process to unwind financial firms, and create an independent agency with a board of regulators to monitor systemic risk challenges. This agency could require companies that threaten the economy to divest of some of their holdings.

Dodd's bill also creates a single bank regulatory, consolidating the regulatory power of the Federal Reserve, the FDIC, the Office of Thrift Supervision and the Comptroller of the Currency into a single entity.

He said this would end the current Byzantine system of multiple banks regulators which results in conflicting regulation, duplication, overlap, and charter shopping by banks.

Dodd's bill creates a new office of Credit Rating Agencies at the Securities and Exchange Commission to bolster the regulation of credit rating agencies.

Dodd said his legislation will improve the regulation of derivatives. Under his bill, over-the-counter derivatives would be regulated by the SEC and the CFTC, more would be cleared through centralized clearing houses and traded on exchanges. Uncleared swaps will be subject to margin and capital requirements and all trades would be reported so that regulators can monitor risk.

Under Dodd's package, hedge funds worth over $100 million would be required to register with the SEC as investment advisers and to disclose financial data needed to monitor systemic risk and protect investors.

Dodd said his plan is a "discussion draft" that will be modified as it is reviewed and reworked by his panel. He said he is "confident and optimistic" that Republicans will work with him to craft a consensus bill.

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