Today, the House Agriculture Committee held a hearing to review discussion draft language that would create a systemic financial risk regulator and oversee financial firms considered “too big to fail." The Committee called the hearing to review the Financial Stability Improvement Act discussion draft because of provisions that fall under the Agriculture Committee’s jurisdiction.
Draft legislation was released by the House Financial Services Committee on Oct. 29, based on a proposal put forth by the Treasury Department earlier this year. The language creates a Financial Services Oversight Council made up of several agencies - including the Commodity Futures Trading Commission - which would be given powers to identify certain financial players and activities that could pose a systemic risk to the economy. The Federal Reserve would be given broad powers in the draft, with the ability to impose standards despite the objections or expertise of Council member agencies.
In addition, the draft contains loan retention provisions affecting the Farm Credit Administration, which oversees a nationwide network of borrower-owned lenders that provide credit and related services to farm country.
“I am skeptical of the idea of a systemic risk regulator in general and very much opposed to having the Fed play a leading role as this draft proposes," said House Agriculture Committee Chairman Collin C. Peterson of Minnesota. “No one regulator should be given so much independent power over our economy, certainly not one whose governance has been influenced more by the wishes of major banks than the American people. I appreciate the witnesses’ input today on the effect of this legislation on their agencies. If the forthcoming legislation’s impacts on those areas in our Committee’s jurisdiction are not addressed, we may be back here again to review this bill."
“I was particularly pleased to hear CFTC Chairman Gensler say that the futures market does not need multiple regulators," said Ranking Republican Frank Lucas of Oklahoma. “As this bill reads now, the people who have the regulatory responsibility over the futures market on a daily basis can be overruled by some super regulator, which has no expertise in these nuanced markets. This is one of the many shortcomings with this bill that needs more work."
The opening statements of all witnesses are available on the Committee website at http://democrats-agriculture.house.gov/hearings/index.html. A full transcript of the hearing will be posted on the Committee website at a later date.
Witness List:
Panel I
* The Honorable Gary Gensler, Chairman, Commodity Futures Trading Commission,
Washington, D.C.
* The Honorable Elisse B. Walter, Commissioner, Securities and Exchange Commission,
Washington, D.C.
* The Honorable Leland A. Strom, Chairman and Chief Executive Officer, Farm Credit
Administration, McLean, Virginia
http://democrats-agriculture.house.gov
Source: House Committee on Agriculture
