On Jul 31, 2009, at 5:54 PM, Office of Senator Mark Warner wrote: Dear Mr. Hull, Thank you for contacting me. Many Virginians have voiced their concerns about how the current tumultuous economic situation has affected them personally. Failures in regulation, market discipline, and common sense have created the subprime mortgage crisis and subsequently the collapse or near collapse of many major financial institutions. At the start of 2009, we knew we were facing the deepest recession since the Great Depression. This crisis has stunted America's competitiveness in the global economy. Although there is no silver bullet, Congress and the Administration have acted on a number of fronts to get Americans and our markets back to work. A three-pronged plan is being implemented to keep Americans at work:
As a member of the Senate Committee on Banking, Housing, and Urban Affairs, I am working to ensure that reform of regulation over the financial industry significantly improves transparency, stability of oversight, and day-to-day incentives guiding transactions. On June 17th, 2009, the Administration released its blueprint for regulatory reform, entitled, "Financial Regulatory Reform: A New Foundation," available at http://financialstability.gov/. The Senate Banking Committee will continue to hold hearings and conduct robust research and interviews as the Senate considers and drafts legislation to modernize regulation of the financial industry. Only comprehensive reform of the industry will provide for a framework to handle these types of crises in the future and ensure that our markets will again be places for growth and innovation. The President has offered an ambitious agenda that will enhance consumer protection, streamline regulation to reduce cracks in the system, and require regulation of firms that have previously had none. While I agree with these broad goals, Congress must work to ensure that whatever passes will work; I am working closely with my colleagues on the Banking Committee to accomplish these objectives. One area I have focused on recently is systemic risk. In order to prevent another meltdown in the future, I have proposed that we establish a Systemic Risk Council, similar to the National Transportation Safety Board or the National Security Council. This new council would consist of the Treasury Secretary, the Chairman of the Federal Reserve, and the heads of the major financial regulatory agencies. Although a risk council is not a silver bullet, it avoids the pitfalls of entrusting systemic risk responsibility with one agency that has other missions that can be a source of conflict and would ensure that unregulated market sectors do not emerge. Additionally, as part of a responsible exit strategy from government ownership of TARP-recipient companies, such as AIG, Citigroup, and General Motors, I introduced The TARP Recipient Ownership Trust Act of 2009 with Senator Corker of Tennessee. American taxpayers deserve to have their investments managed in a way that rewards the enormous risk we took in helping these institutions. The bill will move any government ownership stakes in private companies greater than 20 percent (which, by fall of 2009, will include AIG, Citigroup, and General Motors) into a newly created Limited Liability Corporation (LLC). TARP-assisted institutions will be required to be managed in the private sector by managers who have been successful in the private market in order to maximize the return on the investment made by the government. Thank you again for contacting me. You can read more about these ideas, my additional proposals, and ongoing work on financial reregulation at www.warner.senate.gov under news clips. As the 111th Congress continues, please continue to share your concerns and views. Sincerely, MARK R. WARNER United States Senator |