Political Quotes

“I filed an amendment yesterday that, I hope, will be included in this banking bill that the Senate is considering today and tomorrow. My amendment was inspired by a bill I introduced last July, which is a simple bill, bipartisan, and should be noncontroversial. Here is what the amendment would do: It would exempt trust-preferred securities from a bank's capital requirements. Now, you ask: What is a trust-preferred security? It is an investment vehicle that looks a little bit like equity and, at the same time, looks a little bit like debt. How did these come about? Actually, the FDIC asked many banks to invest in such securities in previous decades. A company creates trust-preferred securities by creating a trust, issuing debt to it, and then having it issue preferred stock to investors--trust, debt, and preferred stock to investors. The FDIC used to like trust-preferred securities. It considered them sound investments before 2010. May I repeat: The FDIC asked many banks to invest in these securities. However, through its interpretation of the Basel III regulations, the FDIC is now counting these securities against the banks' capital holdings. Who is affected by this? It happens to be 20 small banks in the heartland of America.…”