New Democrat Coalition's Financial Services Task Force Announces Working Group on Regulatory Modernization
With the unprecedented federal takeover of insurance giant AIG, and continuing instability on Wall Street rattling investors worldwide, the New Democrat Coalition's Financial Services Task Force, chaired by Reps. Melissa Bean (IL-08) and Tim Mahoney (FL-16), today announced a working group that will focus on the need for regulatory modernization of the financial services industry.
"I am pleased that two of the most constructive and thoughtful members of the Financial Services Committee, Reps. Bean and Mahoney, will be heading up this New Democrat Working Group. The existence of the Working Group will be very helpful in our efforts to adopt sensible, appropriate regulatory reform," said Rep. Barney Frank, the Chairman of the House Financial Services Committee.
"This unprecedented move by the Fed highlights the dangers of letting an antiquated system govern a 21st-century marketplace," said Bean. "These upheavals are a startling indication of the need to update our oversight of capital markets and the financial services industry."
"In my almost 30 years of business experience, first in technology and more recently on Wall Street, I can tell you that when Wall Street innovates the American economy needs to duck," said Congressman Mahoney. "This current crisis again shows the need for Congress to take measured action to identify these risks before they destroy jobs and the financial security of Americans."
Earlier this year, the Treasury Department released its Blueprint for a Modernized Financial Regulatory Structure, which calls for comprehensive regulatory reform to reflect the complexity and overlap of today's financial markets. The Treasury report follows the Schumer/Bloomberg report and a report by the U.S. Chamber's bipartisan commission, all of which underscore the need to overhaul our regulatory environment in order to maintain the competitiveness of our capital markets.
While emergency backstop measures, such as the AIG intervention, are meant to help stem the tide sweeping the global financial markets, the current crisis has proven to be beyond the market's ability to correct itself since the subprime mortgage fallout in 2007. With various measures directed towards Bear Stearns, Fannie Mae and Freddie Mac, and now AIG, the Bush Administration has been using taxpayer dollars to treat the effects without dealing with the root cause.
"If we're going to put federal taxpayer dollars at risk, then the federal government needs effective, dynamic oversight of these markets," Bean said.
"As someone who has worked both on Wall Street and now in Congress, I know how important it is to have referees on the field to call the game," said Rep. Ellen Tauscher (CA-10), the only current Member of Congress who once held a seat on the New York Stock Exchange and chair of the NewDems. "A fair regulatory system is critical to the function of our financial markets, and to protecting consumers from this kind of financial security roller-coaster. For eight years, the Bush Administration has been asleep at the switch. It is long past time we update our regulations to reflect the 21st century economy."
Congressman Bill Foster (IL-14), a member of the new working group who sits on the Financial Services Committee, said "Given the unprecedented challenges gripping our financial markets, it is vital that we modernize our financial regulatory system and ensure that something like this is never allowed to happen again. I am anxious to get to work on solving these problems, restoring investor confidence, and bringing some stability to our economy."
The New Democrat Coalition, always leaders on the economy and innovation, is committed to enacting policies that maintain U.S. competitiveness, meet the challenges posed by globalization in the 21st Century and strengthen our national security. The NewDem Coalition is dedicated to providing the leadership necessary to implement policies that will ensure that America maintains its prosperity and global leadership.
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