Rep Scott Garrett Statement on the Obama Administration’s Decision to Spread Too-Big-To-Fail to more companies
Sep 4, 2014
WASHINGTON, D.C. – Rep. Scott Garrett (R-NJ), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, issued the following statement regarding today’s Financial Stability Oversight Council (FSOC) decision to spread too-big-to-fail:
“Today’s irresponsible and inappropriate designation of another U.S. business as too-big-to-fail only strengthens my resolve to reform the out-of-control FSOC. First and foremost, we must ensure taxpayers are not on the hook for FSOC’s dangerous regulatory overreach. This designation flies in the face of a unanimous, bipartisan vote in the House of Representatives to postpone any additional designations.
“The FSOC makes politically motivated decisions to expand the Fed’s power with little-to-no real-world analysis. To make matters worse, the FSOC refused to even provide today’s designee with the same minimal level of review that the Council provided for asset management companies. It is obvious that the FSOC refuses to improve its operations, conduct, or decision-making processes. Accordingly, it is incumbent upon Congress to help FSOC improve itself. I look forward to having members of the FSOC come before the Committee in the near future to explain today’s actions.”
What about the Fed’s decision to force too-big-to-fail banks to develop plans for “bailing-in” in the event of a solvency crisis, taking the technique that was test-driven by establishment untouchable felon John Corzine in rhe MFGlobal crisis (client segregated cash accounts) and by the Cypriot banks when they stiffed their Russian customers (regular cash deposit accounts), and not only buying the car, but making it the standard vehicle in a corporate fleet? (This policy decision was mentioned by the Vice Chairman of the Fed on August 11th during an overseas public speech, the transcript is on the Fed’s website.) What does our congressman think about this abomination?