Swaps Regulatory Improvement Act

Floor Speech

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Mr. CRAWFORD. I thank the chairman for yielding.

Mr. Speaker, contrary to the intent of section 716 to reduce risk in the financial system, it does exactly the opposite. It creates more risk, and it places an undue burden on financial institutions for conducting legitimate hedging activities. This legislation would take an important step to ensure that Dodd-Frank is living up to its goal to reduce systemic risk, a goal on which both parties agree.

Even former Financial Services Committee Chairman Barney Frank--the namesake of the bill in question--endorsed this bill last Congress, saying that it will not in any way, shape, or form reduce sensible regulation in derivatives. I rarely agreed with Congressman Frank, but I certainly share the goal of regulating the financial system in a sensible way, and I think that is the key.

H.R. 992 would prevent financial institutions from forcing their derivatives business outside the banking structure to an entity that is far less regulated than the bank. So, while some may believe that section 716 provides more regulation, they are mistaken. Again, it is the other way around. All we are asking is to allow financial institutions to mitigate their risks so we can have a stronger banking system.

A stronger financial system makes America more competitive economically; it creates jobs; and it provides stability for the consumer. I urge my colleagues to support this commonsense legislation.

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