Patrick McHenryChairman

Washington, September 11, 2024 - Today, the House Financial Services Subcommittee on Financial Institutions and Monetary Policy, led by Chairman Andy Barr (KY-06), is holding a hearing entitled “Transparency in Global Governance.”

Watch Chairman Barr’s opening remarks here.

Read Chairman Barr’s opening remarks as prepared for delivery:

“Today’s hearing will further examine the lack of transparency in U.S. financial regulators’ interactions in global governance bodies.  

“Despite numerous attempts to obtain transparency, we still know next to nothing.  

“The global governance bodies include the Bank for International Settlements—or BIS—the Basel Committee on Banking Supervision—or BCBS—and the Network for Greening the Financial System—or NGFS. 

“Lacking transparency from our own banking regulators, this Subcommittee invited representatives from the BIS, BCBS, and NGFS to testify at today’s hearing.

“Disappointingly, both the BIS and BCBS declined but did offer to answer questions in some other venue. The opaque Network for Greening the Financial System never even responded.

“Lack of transparency and willingness to engage with Congress is incredibly concerning given our U.S. regulators’ participation in and reliance on standards set forth by these bodies. 

“The European Commission is represented in the BCBS, however there is no representation from the U.S. Congress.  

“When the NGFS does choose to engage with Congress, they seem to do so in a partisan manner. While the NGFS did not even respond to our invitation, it participated in an October 2019 meeting with ‘the U.S. Senate Democrats’ Special Committee on the Climate Crisis.’

“The lack of transparency and accountability in our regulators’ dealmaking with secretive global organizations raises concerns about the extent to which other countries are influencing financial regulation here in the United States.

“As recently as 2017, Russian and CCP banking officials have astoundingly been scrubbing U.S. laws and regulations for adherence to Basel rules, sometimes physically on site at our U.S. agencies. 

“Our Federal financial regulators receive training from global governance bodies, yet Congress is not allowed to oversee what those training sessions contain.

“There have been recent hearings in this Committee where our regulators have feigned little to no knowledge of what goes on in these organizations or their agencies’ participation. Our financial regulators do not even track how many resources they devote to jointly working with global governance bodies behind closed doors.

“In the case of the NGFS, they seem to have no knowledge about how it is funded or how much influence China has.

“The influence of secretive global governance bodies on the U.S. regulatory framework has increased significantly during the Biden-Harris administration.

“The flawed Basel III Endgame is one recent example of federal banking regulators inserting BCBS’s goals and secretive dealmaking into the capital framework for U.S. financial institutions.

“U.S. banking regulators have also inserted principles to guide U.S. banks on purported climate-related financial risks, following directives of the NGFS along with the BCBS, BIS, and others.

“Recently, in a 2022 decision taken by the BCBS with U.S. approval, there was a secretive deal made to change GSIB standards that favors the largest of European banks over U.S. banks with no public consultation, contrary to the BCBS’s own rules.

“That discreet deal was called out from commentators across the ideological spectrum, but it remains in place.

“I sent a letter this week to the Federal Reserve asking whether they will continue supporting this discrepancy between U.S. and foreign jurisdictions’ GSIB standards. 

“To be clear, international cooperation and sharing of research results among peers and allies can be positive and help set rules of the road for financial markets.

“However, when transparency is lacking, the scale tips in favor of our competitors, and global governance gets partially funded and guided by some of our adversaries, we have a problem. 

“We can begin tackling the problem with simple measures to require that our regulators do a better job than they have been doing in being open and transparent.

“To accomplish this, I introduced the Congressional Banking Regulation Priorities and Accountability Act of 2024.

“I urge my colleagues from both sides of the aisle to support my non-partisan legislation.

“It strengthens Congressional oversight of the activities of federal financial agencies by improving transparency regarding their participation in global governance bodies. 

“It shouldn’t be too much to ask that our federal financial regulators provide Congress with information about their dealings abroad.

“My bill simply brings financial regulators in line with other American officials, like those at the State Department and USTR, that adhere to clear reporting structures regarding their involvement overseas.

“I look forward to discussing global governance issues with today’s witnesses.”

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