On the recordJuly 22, 2015
Thank you for the yield, Mr. Chairman. You actually just hit on one of the wonderful ironies and one of the great difficulties we have in our discussions in our own committee. First off, the regulation, the way Dodd-Frank is designed, it is designed for the last problem. It is not forward-looking of what the future looks like. And then there is always the arrogance here in Washington of thinking we know what the future looks like. But there is also a number of professionals in the industry and academia who are now writing about what they call concentration risks. What happens when you tell every bank that they can only hold certain assets? You now have a concentration risk. If something goes wrong in that asset category, the cascade effect is universal. This is now happening up and down our financial system. In many ways, I can make you a powerful argument that the post-Dodd- Frank world is creating a banking system that ultimately is more fragile because of a contagion concentration risk.
