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Swaps Regulatory Improvement Act

Floor Speech

Date: Oct. 30, 2013
Location: Washington, DC
Issues: Business and Consumers Finance and Banking

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Mrs. CAROLYN B. MALONEY of New York. I thank the gentleman for yielding and for his leadership.

Mr. Speaker, I rise in support of H.R. 992. This bill passed overwhelmingly out of the Financial Services Committee earlier this year with broad bipartisan support with a vote of 53-6.

The whole point of the Dodd-Frank reforms was to improve the safety and soundness of our financial system; and H.R. 992, the bill before us, will help us do just that.

This bill does not expose the taxpayer to any additional risk. In fact, it includes a ban on taxpayer bailout of any swaps or any use of taxpayer money. Under H.R. 992, truly risky swaps will still be pushed out of commercial banks while at the same time bank regulators can see all of the bank's swaps activities.

As well intended as section 716 is, it turns out it would actually hinder the oversight of regulators of the derivatives market. That is why Barney Frank, the former chairman of the Financial Services Committee and, of course, the Frank in Dodd-Frank, said during the debate in the last Congress of this same bill that is before us now, H.R. 922:

It will not in any way, shape, or form reduce sensible regulation of derivatives; it will not increase any exposure to the financial system from derivatives.

The economist of Moody's, Mark Zandi, also supports this bill and has said that section 716, as written, actually increases systemic risk and creates major inefficiency in the markets.

Even Federal Reserve Chairman Ben Bernanke opposed section 716, as written, stating that the way it forces these activities out of insured depository institutions ``would weaken both the financial stability and strong regulation of derivative activities.''

So Ben Bernanke has said that our bill before us will protect safety and soundness. Barney Frank agrees. Mark Zandi of Moody's agrees. I agree. And I urge my colleagues to agree with us and support safety and soundness of our financial institutions by supporting H.R. 992.

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