[StBernard] PRESS RELEASE: In the Wake of Global Debt Crises, House Democrats Call for Implementation of Reforms in the Wall Street Reform and Consumer Protection Act

[Westley Annis]

In the Wake of Global Debt Crises, House Democrats Call for Implementation
of Reforms in the 

Wall Street Reform and Consumer Protection Act


WASHINGTON - Congressman Barney Frank (D- MA), along with Congresswoman
Maxine Waters (D-CA), Congressman Stephen Lynch (D-MA) and Congressman Joe
Courtney (D-CT) released the following statement today calling for
implementation of reforms in the Wall Street Reform and Consumer Protection
Act:

 

"The possibility of default on Greek or other European debt dramatically
illustrates the need for the United States to move forward rapidly to
implement the reforms passed by Congress in the Wall Street Reform and
Consumer Protection Act.  The difficulty in global financial markets is
greatly exacerbated because we don't know who is exposed to what risks and
how large those risks are.  Consequently, renewed growth is at risk
everywhere.  And recent stories in The New York Times, The Financial Times,
and The Wall Street Journal report that those with significant sums at risk
may include American financial institutions.

 

"The lack of transparency - particularly in derivatives markets - was a
major cause of the recent crisis and remains a clear and present danger to
the financial system.  The current situation regarding credit-default swaps
on European debt is characterized by a similar lack of transparency.  As one
market watcher told the New York Times
<http://www.nytimes.com/2011/06/23/business/global/23swaps.html?_r=2> ,
'There's not any clarity here because people don't know. The industry is
still refusing to provide the disclosure needed to understand this. The
Street doesn't want you to see what they've written.'  

 

"Several major provisions of the financial reform law are specifically
designed to eliminate such dangerous opacity in our markets and
institutions, and to give investors and regulators the tools to find and
address the buildup of undue risk before it becomes a threat to the system.
The law brings the derivatives markets out of the shadows by requiring
reporting of all swap transactions and by requiring exchange-trading and
central clearing for most of them; gives authority to the Financial
Stability Oversight Council and the Federal Reserve with the help of a new,
specially-dedicated Office of Financial Research which will collect
information from systemically significant financial institutions; requires
these firms to submit detailed plans for their own orderly dissolution in
the event of failure; and requires rigorous periodic stress tests for these
firms.

 

"Sadly, even with another potential financial disruption demonstrating the
clear need for more openness and accountability, Congressional Republicans
continue their efforts to delay, defund, and defang these and other
provisions that will make our markets safer and our regulators more
effective.  Our financial system needs more transparency and serious
oversight, not less, and needs it sooner, not later, to prevent risky
behavior from burgeoning into full-blown financial crises.  The Wall Street
Reform and Consumer Protect Act provides a path to that result, and we need
to stay on it."

 

 

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