October 1, 2010
Good afternoon. I thank Secretary Geithner for calling today’s first meeting of the Financial Stability Oversight Council (FSOC). The FSOC was established in the Dodd-Frank Wall Street Reform and Consumer Protection Act to ensure protections for the American public. I am honored to serve on the Council and look forward with working closely with my fellow council members.
In 2008, the financial system failed, and the regulatory system failed. As a result, a lot of Americans are still suffering. The crisis left them with an uncertain future. Many now own homes that are worth less than their mortgages. Many are still seeking employment.
This council is just one response to that crisis, but one that I hope will be very beneficial. It is an opportunity for regulators – now and in the future – to ensure that the financial system works better for all Americans. The financial system should be a place where investors and savers can get a return on their money. It should provide transparent and efficient markets where borrowers and people with good ideas and business plans can raise needed capital.
The financial system also should allow people who want to hedge their risk can do so without concentrating risk in the hands of only a few financial firms. One of the challenges for this Council and for the American public is that like so many other industries, the financial industry has gotten very concentrated around a small number of very large firms. Adding to our challenge is the perverse outcome of the financial crisis, which may be that many people in the markets have come to believe that this handful of large financial firms will – if in trouble – have the backing of the taxpayers. As it is unlikely that we could ever ensure that no financial institution will fail – because surely, some will in the future – we must do our utmost to ensure that when those challenges arise, the taxpayers are not forced to stand behind those institutions and that these institutions are free to fail.
There are definitely very important decisions that this Council will make, such as determinations about systemically important nonbank financial companies and systemically important financial market utilities and clearinghouses, resolving disputes between agencies and completing important studies as dictated by the Dodd-Frank Act. Those these specific decisions are very important, to me it is essential that we make sure that the American public doesn’t bare the risk of the financial system and that the system works for the American public, for investors, for small businesses, for retirees and for homeowners.
I’m honored to be a part of this effort.
Last Updated: October 4, 2010