Political Quotes

“I thank Ranking Member Waters for yielding. Mr. Speaker, I rise in opposition to H.R. 6392, the Systemic Risk Designation Improvement Act of 2016. Although many aspects of this bill have sound arguments behind them, it contains fatal flaws which should preclude our support. The financial crisis taught us many things about our markets and overturned some fairly fundamental assumptions that were widely held prior to it. One of the things we learned was the extent to which systemic risk could build up in a regulatory paradigm that was focused entirely on entity risk. It was quickly evident that the failure of a large institution posed a greater threat than previously believed. At the same time the phrase ``too big to fail'' became public shorthand for some of these firms, economists and other experts talked about another important aspect, too interconnected to fail. Asset size is a quick and useful metric for determining whether a firm is potentially so large that a failure could have a massive impact on systemwide stability, and evaluating the risks that single institutions can pose to the system often require a more nuanced approach. The exposure of counterparties to a failing firm or exposures of other institutions to the same risks are systemic risk factors that should rightly be considered. Also, as the economy grows, many fixed thresholds, such as $50 billion, will shrink in importance.…”