Committee Continues Focus On Dodd-Frank’s Impact On Economy, Jobs
Washington,
May 15, 2012 -
The Financial Services Committee continues its in-depth look at the 2,300-page Dodd-Frank Act with a subcommittee hearing on Wednesday examining the designation of non-bank financial institutions as “systemically important” – a euphemism for these institutions being deemed by government as “Too Big to Fail.”
The Financial Stability Oversight Council (FSOC) – an interagency body of regulators created by Dodd-Frank – issued a final rule and interpretive guidance describing how it will designate non-bank financial institutions as “systemically important” on April 3. During Wednesday’s hearing, members of the Financial Institutions and Consumer Credit Subcommittee will discuss what it means for a company to be designated “systemically important,” whether the designation provides firms with an advantage over their competitors, and how FSOC arrived at its final rule.
“Dodd-Frank did not end ‘Too Big to Fail,’ as its supporters claim; it enshrined ‘Too Big to Fail’ into law. When government declares a financial institution is ‘systemically important,’ it is saying that institution is ‘Too Big to Fail’ because of the perception the government will step in with a bailout to protect it from collapse,” said Chairman Spencer Bachus. “Bailouts must end – period.”
Subcommittee Chairman Shelley Moore Capito said the hearing will allow members to examine the rule’s impact on the economy. “There’s no question that we need to have the necessary safeguards in place to avoid another financial collapse, however we must ensure that new rules do not greatly inhibit economic growth,” said Chairman Capito. “We’ll also hear from witnesses representing entities that may be designated systemically important under the new rule in order to learn how the Federal Reserve’s proposed rule on supervision may impact their operations.”
The Subcommittee’s hearing will take place on Wednesday at 10 a.m. in room 2128 Rayburn House Office Building. Witnesses scheduled to testify at the hearing are:
Lance Auer, Deputy Assistant Secretary for Financial Institutions ,U.S. Department of the Treasury
Michael Gibson, Director, Division of Banking Supervision and Regulation, Board of Governors of the Federal Reserve System
Scott Harrington, Alan B. Miller Professor, Wharton School, University of Pennsylvania
Thomas Quaadman, Vice President, Center for Capital Markets Competitiveness, U.S. Chamber of Commerce
William J. Wheeler, President, Americas, MetLife
Douglas Elliot, Fellow, The Brookings Institution
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