Finally , Mr. Chairman , a fourth priority is to address the basic vulnerabilities and our capacity to manage future crises .
In the face of relentless competition and capital market disintermediation , big financial institutions have hired financial scientists to develop new financial products .
This is an issue that I am actively engaged in through my role as Chairman of the Financial Stability Board 's Working Group on Provisioning .
This provides a unique opportunity for the U.S. to be the leader in this area and provide a model for the effective resolution of failed entities .
If , as expected , the FDIC increases the overall number of potential bidders for failed financial institutions by including more private equity firms , it would increase competition and potentially improve the quality of the bids.Q .4 .
However , Congress and the public have the benefit of hearing the different points of view from the Fed , the Treasury , the FDIC or the SEC , for example .
SEC resources should no longer be devoted to arbitrating whether shareholders should be allowed to vote on resolutions germane to a company 's business .
Our proposal tries to achieve this balance by consolidating the fragmented , scattered authorities that are now spread across the Federal Government and State government .
1220 E. Preventing Inflated Credit Ratings Weak credit rating agency performance has long been a source of concern to financial regulators .
Like the SEC , it should be required to consider whether proposed regulations protect investors and promote efficiency , competition , and capital formation .
This is one question we hope you will address today , Mr. Chairman : Just how strong and how stable are our financial institutions ?
The key point is that exemptions like Rule 3a-7 give the SEC a tool that they could use even without Congressional legislation -- if the SEC was willing to take action .
Several of the bank holding companies under Fed supervision faced severe problems in the crisis -- its microprudential regulation was ineffective .
The policy question facing Congress is whether it makes sense to extend FDIC bank resolution processes to other financial institutions .
Hedge Funds as Financial Investors One of the most important roles that hedge funds play in our economy is that of investor .
With an estimated $ 1.5 trillion under management , the industry is significantly smaller than the U.S. mutual fund industry or the $ 13 trillion U.S. dollar banking industry .
As you are aware , Mr. Chairman , I have been critical of the Fed 's past performance and , in fact , advocated striking the Fed 's supervisory role .
Reforming the Responsibilities and Structure of the SEC : To bring a consistent policy focus to U.S. capital markets , ICI strongly recommends the creation of a new Capital Markets Regulator .
The Chairman noted that the SEC is working towards improving its risk-based oversight , including extending that oversight to investment advisers .
In testimony on July 14 , SEC Chairman Mary Schapiro addressed strengthening SEC examination and oversight and improving investor protection .
The convergence of banks and securities firms also undermined the supportive relationship between banking and securities markets that Fed Chairman Greenspan had considered a source of stability .
Chairman Dodd , my colleagues and I support this Committee 's efforts to modernize our Nation 's financial regulatory system .
During the crisis , many consolidated supervisors , including the SEC , saw large interconnected , supervised entities seek Government liquidity or direct assistance .
At any point in time , the systemic importance of an individual firm depends on a wide range of factors .
Investor concerns about financial institutions increased over the summer as mortgage related assets deteriorated further and economic activity weakened .
Housing and Economic Recovery Act law including measures to reform and regulate the GSEs ; created the Federal Housing Finance Agency .
The Financial Services Roundtable represents 100 of the largest integrated financial services companies providing banking , insurance , and investment products and services to the American consumer .
--------------------------------------------------------------------------- Most importantly , in October 2008 the Congress gave statutory authority to the Federal Reserve to pay interest on banks ' holdings of reserve balances at Federal Reserve Banks .
Is the Fed now , or has the Fed in recent years , purchased Greek Government or bank debt?A .6 .
U.S. supervisory agencies have already increased capital requirements for trading activities and securitization exposures , two of the areas in which losses were especially high .
This would eliminate the ability of the Fed to engage in ` bailouts ' of individual firms or sectors and place such responsibility with the Treasury and Congress , squarely where it belongs.Do you agree with President Plosser?A .1 .
However , we must also acknowledge that many of the systemically significant entities that have needed federal assistance were already subject to extensive federal supervision .
These standards must apply across all jurisdictions and issuers , otherwise gaps create competitive pressures to reduce standards , as we saw with mortgage lending standards .
The systemic risk regulator should have access to information across the financial markets about institutions that pose significant risk .
Firms are now global in scope , as you noted , Mr. Chairman , and we derive benefits from open , interconnected markets .
Without debt or derivatives or securitization or swaps or other complex financial instruments , we do n't expose any party to losses in excess of their committed capital .
Mr. Bernanke , '' The Fed is involved very unwillingly because there is no good system for addressing the failure of a major financial institution .
Under the current structure , the NCUA can use supervision to control risks taken by credit unions -- providing an additional measure of protection for the Fund .
delinquency rate The number of loans for which borrowers fail to make timely loan payments di - vided by total loans .
We stand ready to work with you , Mr. Chairman , and members of the committee as these issues are resolved through the legislative process .