McHenry Delivers Opening Remarks at Hearing to Conduct Oversight of the Prudential Regulators
Washington,
May 16, 2023 -
Today, the House Financial Services Committee is holding a hearing to conduct oversight of the prudential regulators following recent bank failures. Republican lawmakers will examine regulators’ self-assessments of their responses to the collapse of Silicon Valley Bank (SVB) and Signature Bank, push for greater transparency and accountability from regulators, and highlight the role of Democrat-induced inflation in banking sector turmoil.
Watch Chairman McHenry’s opening remarks here.
Read Chairman McHenry’s opening remarks as prepared for delivery:
“Thank you to our witnesses for testifying today.
“You are here at a pivotal moment for our economy.
“The recent turmoil in the banking sector could not come at a worse time.
“The Biden Administration, and many of my colleagues on the other side of the aisle and Capitol, want to treat the symptoms rather than the disease.
“Our country is suffering from an inflation problem – plain and simple.
“Driven by the economic mismanagement of this administration, inflation is the underlying cause of the volatility we’re experiencing now.
“My Democratic colleagues will roll their eyes just like they did every time Republicans sounded the alarm on skyrocketing prices over the past two years.
“But let me walk you through it. When Democrats forced through their partisan $2 trillion so-called American Rescue Plan, they lit the fuse on runaway inflation.
“Instead of addressing this, the Biden Administration went on a roadshow trying to explain away higher prices. They used words like ‘transitory’ which, to be frank, hasn’t aged well.
“The Fed was late to the game in responding to inflation, they admit that. They had to play catch-up and raise interest rates 500 basis points at the fastest pace in modern history.
“This injected heightened interest rate risks into the financial system. Regulators and supervisors at the Fed were, again, late to react.
“Now, three of the thirty largest banks have been shuttered. There is still market volatility with regional banks. And we are now staring down a credit crunch as banks of all sizes anticipate more onerous regulations and market scrutiny.
“So let me be clear, if Congress and this Administration do not respond correctly, we are just at base camp for the economic woes our country could face.
“A one-size-fits-all regulatory response to this crisis, which has been signaled by this Administration, will work against promoting a vibrant banking system with institutions of all sizes providing a variety of services.
“Instead of a balanced system with small, medium, and large institutions—it will look more like a barbell banking system. With dominant too big to fail banks, as anointed by Dodd-Frank, on one end; and a scattering of very small banks relying on government subsidies to survive, on the other.
“Such a barbell banking system, with a missing middle of healthy regional banks, is not good for communities across America.
“Vice Chair Barr, you have signaled your desire to go beyond reviewing supervisory failures that contributed to the recent bank failures. You have used this crisis to justify progressives’ long-held priority to increase capital requirements and impose more regulations on banks.
“The Fed’s internal review, along with the FDIC’s report and recommendations on deposit insurance, lay bare the playbook for this Administration’s response to this crisis.
“More regulation, more government control, and more spending.
“I know my colleagues across the aisle will use today’s hearing to discuss the debt ceiling. And I welcome that debate.
“Because as I said, this crisis comes down to the economic mismanagement by this administration. The out-of-control Washington spending that led to this uncertainty is the exact same spending that Republicans are working to address in the debt ceiling negotiations.
“I look forward to hearing from our witnesses and I yield back.”
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