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tv   [untitled]  CSPAN  June 11, 2009 11:00pm-11:30pm EDT

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we are expecting conference chaired mike pence very soon and the republican leaders of the financial services committee. to have been involved the past few months in crafting a comprehensive regulatory reform proposal which we are announcing today. let me start by recognizing the distinguished whip eric cantor for a statement. >> special thanks very much and i'm honored to be here with the ranking member spencer bachus and the senior members of the financial services committee. as we unveil as a conference a road map for word to address the number one issue that's on the minds of most americans which is the economy, and we all know economic recovery is going to be
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predicated upon resumption of normal credit conditions so that we can see expansion start to happen again as far as jobs are concerned in the country and we hear a lot and there's a lot of coverage about the heavy hand of government right now in the financial markets. to me it is a heavy hand of the obama administration. who could have told we would continue to find ourselves in the world of continued bailouts, handouts. we wake up one day and we are the proud owners of two of the largest car companies. it is this type of uncertainty and continued reached by government this plan tries to react and say we do have a better way. we don't believe the government should be picking winners and losers and we want to see market for six return under a set of certain limited rules so innovation can occur again and i know i speak for the ranking member and the rest of my colleagues to say we stand
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ready, willing to work with our colleagues from across the aisle to try to forge the solution so that we can see our capital markets returned to the prominence they should enjoy a as far as attracting investment capital costs so we can see an investment recovery. >> thank you, eric. at this time i would like to introduce the conference chair mike pence. >> thank you for being here. i especially want to thank the senior republican on the financial service committee spencer bachus for his tireless efforts on behalf of freedom and free markets. i also want to thank the other senior republicans who've been so instrumental bringing us to this day. congressman hensarling, garrett and all those gathered here for
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putting out a republican vision for restoring essential freedom to our free markets. the american people are fed not. they are fed up with endless bailouts out of washington, d.c. and they know we can't borrow our way back to a growing economy. and they want this to end. they recognize bailing out every business really means. washington is burying future generations under a mountain range of debt and destroying the foundation of free market capitalism that has allowed the nation to prosper for generations. congress cannot continue to ask our working families who played by the rules and pay their bills to bail out the responsible decisions of others or bail out the failed policies in washington, d.c.. enough is enough. today house republicans are standing with the american people who said loud and clear no more bailouts. this package of regulatory for house republicans are
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introducing today built on a few simple principles it's time to end the bailouts that's consumed washington, d.c. since last fall and this time to end the government's ability to pick winners and losers and restore some level of responsibility, personal responsibility in the marketplace. it is time in short to put freedom back into the free markets the proposal offered today by house republicans and outstanding leadership of spencer bachus and those gathered today is a step in that direction and i expect it is going to be a fish in the american people will welcome. >> thank you. thank you, mike and eric for joining us and republicans are united today offering this plan. i want to introduce the republican team the work of the past two months. judy biggert from l.a. is the chairman of the oversight
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committee and she performed a lot of -- with the allies say, ranking member? [laughter] i'm getting ahead of myself by what, a year and have? judy, i appreciate your work. shelley capito on the house and is our ranking member on the house and scott garrett, capital markets and the member. jeb hensarling whose financial institutions. from paul worked on this plan and has endorsed it. he's not here. congressman miller supports the plan so we have come to the united way and we have to other people that worked on it also. we have tom price, senior member of the kennedy and mike castle, if most of you know mike is very involved over the past few days making some decisions, but they
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are very supportive and then we have the vice chairman of the committee, randy neugebauer in fact as we met the past two months we met in randy's office and he's scheduled all the meetings and we have had several meetings. we have all ironed this thing out and we knew we needed to get it right. let me say this, financial services, regulatory reform and the structure of our financial regulatory system is a critical importance and we knew that we had to get it right. we are offering today our solutions to address the causes in the financial crisis that revolve in auslin through and the families we represent to create a transparent accountable for gentry system. you will see a lot of we propose
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here is accountability and transparency and to create a system that will better protect investors, tax payers, and consumers -- consumer protection is very important. and to hold risktakers on wall street responsible for their actions, not the tax payer. the last two years we have seen unprecedented government intervention. they've reacted on occasions with little oversight or accountability. the american people deserve better. they deserve a better financial service regulatory structure. the individuals behind me have worked diligently as i've said contributed immensely to our proposal. during the work we were guided by three key principles and these four principles we not only felt but our constituents were told they were important to
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them. number one, you have heard it before and are going to hear it again, no more bailouts. has anybody missed that? no more bailouts. we think that is very important. second, the government must stop rewarding failure and picking winners and losers. tax payers should never again be asked to pick up the tab for bad debt and risky decisions made by the financial industry. third, we need to restore market disciplines of financial firms no longer expect the government to rescue them, and when we no longer have to endure command and control structure from the government. these three principles are essential to ensuring we have an exit strategy from the cycle of taxpayer bailouts and government intervention which we have all witnessed in the last six months
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and also to build a strong foundation for our financial services industry and bring back more accountability. we are presently in the process of drafting legislation based on this proposal and these principles. at this point i would like to recognize the distinguished ranking member of housing community opportunity subcommittee shelley capito from west virginia. >> thank you. i want to thank mr. bachus for his leadership on this and i think we are presenting a united front because not only do we recognize the seriousness of the issues but i think it is important for us to join together in that large and very complex issue of regulatory reform. as we have heard one of our primary provisions is summed up as no more bailouts. our constituents have bailout fatigue and we do, too, and while we recognize the financial
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institutions, they recognize, the constituents recognize and financial institutions make that choice is to have to live with the results. pour decisions should have consequences and one cannot reward bad behavior. moreover wall street needs certainty about the fact government cannot and should not be charged with picking winners and losers in the marketplace. when firms find themselves with serious financial challenges our proposal calls for enhanced resolution through a new chapter of the bankruptcy code making it more suitable for insuring the orderly unwinding of troubled institutions. by facilitating coordination between regulators and the courts we can bring technical expertise and specialized expertise to the table when these complex financial institutions are at stake. i think we have highlighted what is happening a lot of times we fell back on the complexity of the instruments and nobody really knew how to address those
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and the systemic risk involved. there's already a special class of bankruptcy for farmers, railroads and ms. petites. financial institutions are complex and affording them an expedited class of bankruptcy makes sense so with this proposal market participants will know the consequences of taking on too much risk and there will be no more question waiting for a government bailout. next i would like to turn this over to randy neugebauer. >> thank you commercially. another aspect is to establish a market stability capital adequacy board. a lot of people have been talking about the democrats in the white house have talked about naming one person as the systemic risk regulator. we think that centralizes too much control for one individual. we also are against the concept of farmers being designated us to systemically risky because that i believe gives unfair edna vantage in the marketplace. we've already seen that. we saw the government bought in to picking winners and losers by
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determining who was systemically risky and who was not. that isn't good policy for this country. how does this work? we would form this group that would be appointed, the treasury would lead, we would have people that are a part of the regulatory structure, the new structure and possibly outside people and their task would be to get together on a periodic basis and look at mall only the entities they are regulating but also look out into the marketplace and have discussions to determine what is going on in the marketplace, new products and things going on, how what activities coming on under another regulator is purview is going on on the other side and so being able to have the dialogue and again, to have those kind of discussions allows that discussion to begin to let those regulators go back in the second part on capital adequacy. if you want to regulate the
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entities in this country establishing how much capital for the activities they are involved in is a huge way to do that and more effective way to do that. and so, we think a dialogue provides better and more efficient form and doesn't put the government, one, in the business of picking winners and losers, and secondly it gets it out of the systemic risk business. the taxpayers do not want to be back in the situation again where they've been depressed into being shareholders when they are back home trying to make their mortgage payment and car payment and so we believe this is an effective way to address this particular issue. now my honor to introduce the gentleman from illinois, ms. biggert. >> thank you, randy. and i am here to talk about how our plan answers the question what about the consumer. first of all we have new duties for the new regulator of depository institutions. this regulator will work to end
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our consumers to make sound financial decisions. it will regularly update improved simplify and test disclosures and update and force consumer protection regulations. these are currently the responsibilities spread around about a dozen different federal financial services regulators. and second, we have a new task for consumers who have been wrong, they call my office and say who do i turn to? right now haoles a consumer to know if he or she should contact the occ, otc, fdic or the fed for a few of the agency's? so we have tasked the existing financial literacy and education commission which already coordinate's federal agencies to help consumers with a new job. we are moving to supporting, actually it is a bipartisan proposal i worked on last congress. we require the commission to set
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up a one-stop shop, 1-800-number and website for consumers to report to see if he or she has been wrong and the commission will collect the data and coordinate with the appropriate federal regulators to resolve the issue or identify trends that need to be addressed in the new regulation or fraud and third is the crackdown on fraud. finally when it comes down to cracking down on fraud we mean business. our proposal bolsters law enforcement resources and increases civil and monetary penalties for violations and maximizes restitution to victims. so to protect consumers against fraud and help them make informed decisions our proposal in powers consumers. and next i'd like to introduce scott garrett, the capitol markets ranking member. >> thank you for it and before i begin let me also say thank you
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to the conference chair, mike, for being with us today and also, thank you to the whip, eric cantor not only for being with us but for being so personally involved in the deeply interested both himself personally and his staff on these important financial issues. thank you of course goes to also i will say chairman, our chairman, spencer bachus, for leading us in this endeavor to bring us to where i am quite honestly quite excited with the final product we have out here today. it is something we worked on long and hard and i think we can stand up here and be proud and we work hard to see that this comes into law. i will join with my colleagues also on saying the tendency here is we agree as the american public does we want no more bailouts and we want no more of the federal government picking winners and losers and we want to make sure the taxpayer is not put on the hook going forward and one area i will speak on for a minute and that is dealing
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with the federal reserve and you can think of it in three ways, we want transparency, we want accountability and we want to have fiscal and monetary responsibility. on transparency we want to have like we have every other aspect of government allow the general accounting office the gao to go in and do extensive audit to provide for the extensive and open honest government that we are all calling for. in the area of accountability the same thing and likewise in an area there is i believe will be bipartisan support because we have heard there is the need to address the aspect within the exigent circumstances and activity the fed has been done before to try to draw a ring around that. we need to do that as well and we can do that by simply sitting before they go forward on activities in the future we need to define them and have oversight and accountability by the executive to the treasury and congress as well. finally, in the area of fiscal and monetary responsibility another thing the american public is looking for. and here what we are asking to
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do is reestablished for the fed to hone the interest with the worse it up for and that is monetary policy, to take their of iraq activities that might distract them away and focus on this so that we have the responsibility in that area. if we do these things with other points raised already we will be doing this, drawing a line in the sand from what has occurred over the last year and the year ahead with regard to the bailout and there will be no more bailouts and no more picking winners and losers. there will be market integrity and we will get just as eric cantor mentioned earlier the economic growth this country so badly needs. thank you. and at this point -- [laughter] i was ready to leave. to the person who builds a better than on and more articulately, the gentleman who has put so much hard parts and effort, the gentleman from texas, mr. hensarling.
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>> you certainly make up for the slip. [laughter] >> no nation can bailout, borrow and spend its way into prosperity and that is why i am happy that republicans are united in saying no more bailouts. at the epicenter of the current economic turmoil or federal policies that either incident, cultural or mandate financial and institutions to loan money to people to buy homes who ultimately could not afford to keep them. of all of these failed policies, non-loom larger than those eckert did the government sanctioned monopolies of fannie mae and freddie mac. the expectation, the implicit guarantee of the federal government behind those to gse allow them to swell to unimaginable size and make profits that couldn't have been gained in the marketplace and now expose taxpayers to over $5 trillion of risk. in the 21st century, our housing
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system can't exist and prosper without fannie and freddie being allowed to monopolize and the market, privatize profits and socialize their losses. now ought current market conditions preclude immediate sweeping action to end fannie and freddie market distortions, the current gse model is broken. it is broken, it must be altered. once we have stabilize our economy, the republican financial system reform bill will over a reasonable period of time transition with the secondary market away from government sanctioned monopolies towards a competitive free market. any piece of legislation that purports to reform or financial system and does not touch the any or freddie cannot be taken seriously and the transition period the republican bill would ensure fannie and freddie are financially rock-solid, limited in scope and please are focused on an achievable public good. the conservatorship will sunset
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under the bill, their portfolios will shrink and other government subsidies will wind down. above all, the republican bill will protect taxpayers from ever again having to backstop the mother of all bailouts, that the fannie and freddie and now it's my honor to introduce the chairman of the republican study committee, the gentleman from georgia, dr. tom pryce. >> thank you. i want to thank you all for coming. i can't tell you how truly pleased i am to stand united with my republican colleagues to champion the reforms that would restore the function and integrity of our regulatory system. we find ourselves in the current challenge today not due to deregulation, but due to an effective and on responsive regulatory structure. the space solution as they talked about is to guarantee more bailouts through systemic risk regulator.
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their plan will establish a permanent bailout agency. the american people are sick and tired of bailouts and so are we. there should be no more federal bailouts. it's time to end having washington pick winners and losers in the marketplace and it's time to end this political economy that isn't what made us the greatest nation in the history of the world. our plan embraces principles and will fall. it reforms the current wall to facilitate the unwinding insolvent non-bank institutions. we ensure those charged with responsibility for oversight have the authority to accomplish necessary regulatory actions and our plan ensures the federal reserve received the transparency and accountability demanded by every single american and our plan would restore the integrity of the system and and still the confidence necessary for free-market capitalism in the nation to survive and to fly by remembering the principal if we remove all risk we remove all
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report and we become a very different and varied land society. this is a thoughtful and common sense plan piece of legislation that will be produced from it that embraces the principles americans know and love. we urge all of our colleagues to adopt and embraced this reform. i am honored to yelled back to the rank the member, mr. bachus. >> i appreciate all of my drinking member comments, and i appreciate the leadership of being here. yesterday i met with leader boehner and several representatives from different groups to outline some of this program, and when i think there
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was a pretty unanimous agreement this was a comprehensive and a sound approach. at this time i want to take questions. this plan is not a plan of talking points. it is actually a plan several pages long single spaced typewritten. a lot of questions you probably ask now you probably have answered just by reading this plan. but at this time, we will take questions. >> [inaudible] -- what kind of response in the proposal? >> i will take those in reverse order. [laughter] for chairman frank called twice today asking for a copy of the plan, and we have just sent him a copy simultaneously with this conference so i have not heard from him. we have all along this process we wanted to put out a plan what
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we consider the solutions, what we consider our blueprint for preventing what happened last year, and for protecting as i said, consumers, protectors, and taxpayers. and we want very much to work in a bipartisan way across the aisle and we hope by putting out of this comprehensive plan it will be able to compare our plan with the other plan and work across the aisle in a bipartisan way. as you know, things work better in that regard. to any other members have -- >> [inaudible] [laughter] >> ranking member, you know, the american people seem to want regulation, and i'm wondering if that will change by the fall and
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does this adequately address that concern and do you articulate that to the american people so to speak? >> i would say that with the american people want, number one, they want to avoid what has happened in the last six months or year with the financial services industry and economy, and we believe we can have smarter regulation, not more regulation. >> i wonder if you can be more specific about which of the pickings of winners and losers do you wish hadn't happened and let go or -- which of the outcomes of lehman brothers [inaudible] >> mabey difference of opinion, but we don't want -- we don't want to pick any winners and losers. >> i would like to say something about that. if you go back to september, or
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even into march when a lot of this was occurring and began to occur in a lot of the decisions if you recall were done over the weekend. this no transparency or accountability or uniform plan, and then you would almost -- i would wake up in the morning monday morning to find out who had won and who had lost, who was going bankrupt and who would get saved, and i don't think that is a method the american people who want to know what is going on and know their investments are safe, the future is safe in terms of their economics and i think our plan brings forth a very good ideas to avoid those kind of scenarios. >> on that .1 of the things i found in talking to the stakeholders and investors and people back in my district i represent new jersey so a lot of investors there is the continue to literally sit on the sidelines today with regard to their investments. why? because they do not know what the rule of the road are going to be today or tomorrow and what the administration is when to
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pick as a winner or loser and so why invest their dollars and in pension funds that may be on the losing side of the commission tomorrow? that is why i am closing this and turned over to jeff -- that is why i made reference earlier we are drawing the line what was in the past when forward when we have a system in place that everyone will know what the mechanism will be for failing institutions, with the mechanism will be for successful institutions and the like so the rules will be clearly spelled out and investors will get back into the marketplace. i think jeff from texas would like to speak on that. >> i want to say i am not sure how useful the question is in this sense. different members had different views for example on t.a.r.p. the piece of legislation designed for stability and taxpayer protection has now morphed into a vehicle to be a leverage to advance a social,
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political and economic agenda of the administration this plunging this nation further and further in debt and this unified republican proposal number one having the federal reserve be able to attend to their monetary policy having an enhanced chapter of the bankruptcy and having the said still have the ability on an emergency basis to provide liquidity to the system but not to bail out individuals firms and pick winners and losers. what is important is what we need to do going forward. >> i wanted to ask mr. hensarling or if anybody wants to comment about barney frank's executive compensation plan, the say on paper, the accountability and the compensation rules don't go far enough to punish bad behavior. anyones reaction. ..


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