from the inbox:
Congressman Paul E. Kanjorski (PA-11), the Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, today favorably commented on the proposed Wall Street reform bill released by Senate Banking Committee Chairman Christopher J. Dodd (D-CT). The Dodd proposal includes a slightly modified version of the House-passed Kanjorski “too big to fail” amendment to prevent future taxpayer bailouts by empowering federal regulators to rein in and dismantle financial firms that are so large, inter-connected, or risky that their collapse would put at risk the entire American economic system.
“Senator Dodd has crafted a credible bill aimed at reforming the way that Wall Street operates and better protecting the American economic system,” said Chairman Kanjorski. “In December, the House passed its Wall Street reform bill, and today we took an important step towards achieving a similar goal in the Senate. Now is the time for Congress to pass a strong bill that fundamentally changes the way that Wall Street works, safeguards the families that live and the small businesses that operate on Main Street, and provides investors with strong protections. Because the differences between the House-passed bill and Senator Dodd’s proposal are easily bridgeable, I believe that we can quickly reach a final agreement in a conference committee on financial services regulatory reform legislation once the Senate acts. I therefore urge the Senate to act quickly on the Dodd draft.”
“Significantly, the Dodd plan includes language quite similar to my initial proposal to permit regulators to rein in and break up ‘too big to fail’ financial companies, especially those that pose grave threats to our economy. It also includes the recent Obama Administration proposals not only to bar proprietary trading by insured banks, but also to further limit their size and scope,” remarked Chairman Kanjorski. “As I initially advocated, we must provide regulators with the flexibility to impose additional restrictions on large financial firms to protect our economy, work to prevent future bailouts, and proactively break up those companies that have become ‘too big to fail’. As advanced by former Federal Reserve Chairman Paul Volcker, we additionally ought to provide explicit rules about what the players on Wall Street can and cannot do. The lessons of this financial crisis dictate that we must work to end the era of ‘too big to fail’ financial institutions. My amendment and the complementary Obama Administration’s Volcker rule proposal do just that. I commend Senator Dodd for addressing both of these matters in his plan.”
Regarding investor protection issues Chairman Kanjorski observed, “In order to restore order in our markets, we must also improve investor confidence and reform credit rating agency regulation. I am therefore pleased that the Dodd proposal includes a number of important investor protection reforms. As it continues to consider these matters, I am hopeful that the Senate will work to include many more of the comprehensive reforms found in my bill -- the Investor Protection Act -- which was incorporated into the House-passed Wall Street reform legislation. We especially need to ensure the creation of a strong, uniform fiduciary duty standard to protect investors. Finally, we need to fundamentally reform the way the U.S. Securities and Exchange Commission operates and the way it is funded; my reforms included in the House-passed bill and the Dodd proposals aim to achieve these important ends.”
On December 11, the House passed H.R. 4173, the Wall Street Reform and Consumer Protection Act, which included the Kanjorski “too big to fail” amendment. About a month later, President Obama announced his proposals to limit the size and scope of financial companies, and both Administration officials and House leaders have regularly stated that the President’s proposal builds upon the Kanjorski amendment to address companies that are deemed too big to fail.
On January 27, Chairman Kanjorski also sent letters to Senate Banking Committee leaders offering to provide assistance and background on the Kanjorski “too big to fail” amendment as the Senate worked on its Wall Street reform legislation. The letters were sent to Chairman Dodd and Senate Banking Committee Ranking Member Richard Shelby (R-AL), as well as Senators Bob Corker (R-TN) and Mark Warner (D-VA), two Senate Banking Committee members charged with reaching a bipartisan agreement on systemic risk issues, including addressing “too big to fail” matters. Click here to view the letter. For further details about the Kanjorski “too big to fail” amendment, click here to view a press release from when Chairman Kanjorski first revealed his plan in November.