Blaine Luetkemeyer: “I thank the gentleman for yielding. Mr. Speaker, I rise in support of the combined rule for H.R. 4296, my bill that…”

“I thank the gentleman for yielding. Mr. Speaker, I rise in support of the combined rule for H.R. 4296, my bill that addresses difficulties with operational risk capital requirements imposed on financial institutions, and H.R. 4607, the Comprehensive Regulatory Review Act. Both of these bills are commonsense reforms to regulation that will improve the efficiency of our financial system. My legislation, H.R. 4296, will replace misguided capital standards imposed by the international standard setters, the Basel Committee. The Basel Committee requires U.S. institutions to hold excessive capital based on a ``look back'' approach of an organization's risks, previous earnings, and other provisions that provide no indication of future risks. The methodology employed by this international body has forced our banks to hold hundreds of billions of dollars in reserve rather than putting the money to work in the form of loans and investments. That is money that could be used to fund mortgage loans, car loans, and other day-to-day financing for American consumers. I recognize the importance of our Nation's financial institutions to hold capital in the event of a future crisis or distress, and H.R. 4296 maintains those capital requirements. As a former regulator, I can tell you that it is important to have adequate capital to regard against loss. But there is a sweet spot that needs to be attained, and regulators can do that if you have proper regulation in place.…”