John Sarbanes: “let me quickly run through some important safety mechanisms that are in the Shelby-Daschle-Reed amendment: One, a full…”

“let me quickly run through some important safety mechanisms that are in the Shelby-Daschle-Reed amendment: One, a full capital deduction for investments in subsidiaries so that all such investments would be fully deducted from the bank's regulatory capital. Banks must remain well capitalized after this deduction, meaning even if the subsidiary fails, the bank's capital will remain intact. Two, downstream investments in subsidiaries be no greater than the total amount that a bank could upstream as a dividend to a holding company. So they have exactly the same extent to which they can engage in new financial activities between the subsidiary or the affiliate. We remove any advantage for subsidiaries in terms of transactions with their parent banks by applying sections 23(a) and 23(b) of the Federal Reserve Act to subsidiaries, just like affiliates. It would require the maintenance of subsidiaries as separate corporate entities. The bank's credit exposure to a subsidiary be no greater than it could have been to an affiliate. Real estate investment and insurance underwriting is not permitted in the subsidiary. All of these features, I think, go to ensuring the safety and soundness of the approach contained in the Shelby-Daschle-Reed amendment, and I am supportive of this amendment.”