[Vision2020] Fw: CRAPO NOTES NEED FOR REFORM AT FINANCIAL HEARING

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-----Original message-----

From: "Crapo News Release (Crapo)" newsclips at crapo.senate.gov
Date: Thu, 13 Nov 2008 13:14:45 -0800
To: 
Subject: CRAPO NOTES NEED FOR REFORM AT FINANCIAL HEARING

 

FOR IMMEDIATE RELEASE
CONTACT:    Susan Wheeler (202) 224-5150

November 13, 2008
Lindsay Nothern (208) 344-1108

 

                                 

 

CRAPO NOTES NEED FOR REFORM AT FINANCIAL HEARING

Applauds move away from taxpayer purchase of 'toxic assets' 

 

Washington, DC - Idaho Senator Mike Crapo welcomed the decision by the
Treasury Department to move away from purchasing so-called "toxic
assets" as part of the $700 billion financial rescue program, but
cautioned careful assessment of the program's effects must be an ongoing
process.  Crapo participated in a Senate Banking Committee hearing today
over use of federal funds under the stabilization program.  He voted
against the $700 billion program largely because of the high risk that
taxpayers would face if the government purchases "toxic assets."   

"Secretary Henry Paulson's announcement that Treasury is not planning to
buy toxic assets provides a perfect opportunity to assess the results of
the stabilization package and to consider other directional changes,"
Crapo said during today's hearing.  "I did not support purchasing these
toxic assets and have been very concerned that not only was the taxpayer
not adequately protected, but that Treasury's proposal to buy toxic
assets created an incentive for investors to stay on the sidelines and
watch what the government would do.  Then those investors would step in
at a later date and either buy or purchase or finance purchases from the
government at a discount.

"The direct utilization of our resources to increase liquidity with
specific actions was a more appropriate direction that we should take,"
Crapo added as he queried panel witnesses about the liquidity plans.  "I
hope that we can get into a strong discussion about some of the broad
regulatory structural reforms that we need to consider."  

During today's hearing, Crapo questioned witnesses about the Treasury
Department's proposal to explore development of a potential liquidity
facility for highly-rated AAA asset-backed securities.  He also
questioned witnesses about the need to have broad regulatory structure
reforms.  

"Furthermore, I continue to hear from Idaho employers, from a wide range
of enterprises, that normal access to credit continues to be difficult,"
Crapo added.  "Therefore, it is important that we continue aggressive
efforts to stabilize financial markets and increase the availability of
credit.  But it is essential that we do this right and I remain
committed to helping find the proper path forward."

 

Crapo had strongly argued for regulatory reform of financial
institutions two years ago.  This week, the head of the Commodities
Futures Trading Commission (CFTC) said that he "believes the United
States should scrap the current outdated regulatory framework in favor
of an objectives-based regulatory system consisting of three primary
authorities: a new systemic risk regulator, a new market integrity
regulator and a new investor protection regulator."  The risk regulator
would police the financial system for hazards that could ricochet across
companies to have broad economic consequences.  The market-integrity
regulator would oversee safety and soundness of exchanges and key
financial institutions, effectively acting as a replacement for existing
bank regulators and the Security Exchange Commission's function of
regulating brokerages. The investor-protection regulator would protect
investors and business conduct across all firms.  The plan is similar in
its outlines to an overhaul proposal put forward in March by Treasury
Secretary Paulson.  

 "There is no question that we need to act, but our priorities must be
to protect taxpayers and future taxpayers and conduct a serious
examination of our regulatory structure to prevent future problems,"
Crapo concluded.  "It's clear that we're facing a significant credit
loss, and it has the potential to become even worse."

 

 

 

To directly link to this news release, please use the following address:


http://crapo.senate.gov/media/newsreleases/release_full.cfm?id=304942

 

 

 

 

 

FOR INTERESTED MEDIA:  An MP3 file with Crapo's remarks is available
until Multimedia at Senator Crapo's website, http://crapo.senate.gov; by
calling 1-800-545-1267 and pressing 327 at any time during or after the
greeting and instructions; or on the Internet at
http://src.senate.gov/radio/ under Crapo.

 

 

 

 

 

 

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This is generated from an unattended mailbox. If you have constituent
comments or information you would like forwarded to Senator Crapo,
please do so at the Senator's website, http://crapo.senate.gov
<http://crapo.senate.gov/> . Comments sent to this e-mail address will
not be responded to.


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