House Committee Examines Systemic Risk and the Financial Markets
|July 10, 2008
Washington, DC—House Financial Services Committee Chairman Barney Frank (D-MA)
plans for Treasury Secretary Henry Paulson and Federal Reserve Board Chairman Ben Bernanke will appear at the first of a series of hearings on the policy implications of the transformation of domestic and international financial markets, with a primary focus on the rise of potential systemic risk associated with the dramatic growth in the share of assets held outside the commercial banking system, the complex arrangements that link firms that are regulated differently (or not at all) and the increasing amount of leverage. The hearing is scheduled for Thursday, July 10th. The committee will explore the adequacy of current oversight and regulatory tools, and the extent to which existing structures are adequate to respond to future problems. Specifically, the hearings will examine:
- Current state of the financial regulatory system, both in the United States and abroad, and ways to measure and limit risk without stifling innovations and improve market liquidity and breadth.
- The implications of providing investment banks and others access to the discount window.
- In light of the collapse of Bear Stearns, proposals to improve the regulatory structure to better assess and mitigate systemic risk to avoid a similar or more serious crisis in the future.
- The need for enhanced capital and reserve requirements for financial firms.
- The adequacy of current powers of the Federal Reserve and other regulatory agencies to protect the financial system and the taxpayers.
The committee also plans to invite New York Federal Reserve President Timothy Geithner, S.E.C. Chairman Christopher Cox, other federal regulators, academics, economists and market participants to present their views at subsequent hearings later in July and continuing in the fall.
Witness List & Prepared Testimony: