Andy Barr: “I thank the chairman for the recognition and the author of this legislation, Mr. Zeldin, for his leadership on the…”

“I thank the chairman for the recognition and the author of this legislation, Mr. Zeldin, for his leadership on the Stress Test Improvement Act, which I strongly support. Mr. Speaker, the Federal Reserve administers two stress tests that they believe analyze the ability of U.S. firms to weather various forms of economic turbulence. While the Fed failed to sound the alarm prior to the last financial crisis, the thought is that, with these tests, one of which was instituted by the Dodd-Frank financial control law in the aftermath of the financial crisis, the Fed can prevent or at least mitigate the severity of the next crisis. I believe that stress tests can be very productive and useful, but there is such a thing as overkill. When a relatively healthy patient goes to the doctor, the doctor typically doesn't say: And you need to go to another doctor, and you need to come see me again every month. That is really not required. It adds costs, it is redundant, it is duplicative, and it doesn't materially benefit the patient in terms of better health outcomes. The analogy applies to banks. Stress testing is good, but overkill is costly, and it costs the financial system and doesn't materially add to financial stability.…”