Banking
Strengthening the U.S. Economy and Restoring Investor Confidence
Senator Reed is a senior member of the Banking Committee, which has broad oversight over our nation's financial institutions.
Reed believes it is vital to protect the financial well-being and savings of all Americans and provide access to capital for businesses and local governments to invest in our future, so the U.S. economy can create jobs and grow.
As Chairman of the Subcommittee on Securities, Insurance, and Investment, Reed has focused on a number of key concerns in today's financial markets, including: strengthening investor protections; ensuring the transparency of complex financial markets and products; and improving federal oversight of investment banks and securities firms.
Senator Reed has undertaken a careful review of what has gone wrong with our financial markets. He has held hearings to help identify the problems and solutions necessary to prevent repeat breakdowns, increase transparency, and restore investor confidence in our markets and strengthen the U.S. economy.
In May of 2008, Financial Week noted: "Mr. Reed is starting to make waves, taking on capital markets regulators over lax banking and accounting regulations, calling for a task force to investigate speculation in the commodities markets and raising concerns about efforts to converge U.S. and international accounting standards."
Reed garnered national attention for his close scrutiny of the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) for failing to require adequate disclosure from banks that engaged in rampant securitization using off-balance-sheet entities. Such complex securities have been front and center in the recent credit crisis. By moving these products off their balance sheets, some firms mistakenly assumed that they shielded themselves from risk, when in reality they faced large writedowns on these products, leading to major losses for investors. Senator Reed has asked for increased disclosure so that such risks are properly assessed by firms that offer and hold these products.
The current market turmoil has impacted families in Rhode Island and throughout the country. Senator Reed held hearings exploring the role of mortgage securitizations in exacerbating problems in the subprime mortgage market - which later seeped into the wider mortgage markets. Reed also authored legislation to improve consumer disclosures on mortgages. Reed's Mortgage Disclosure Improvement initiative will help ensure that, in the future, consumers are better informed of the terms of their loan and are warned of potential abuses. By reforming the Truth-in-Lending Act, Reed's provision will protect borrowers when they buy their home, as well as when they refinance a home or get a home equity line of credit.
Reed also asked the SEC to ensure that adequate analysis and assessments are completed by the Commission so that any attempts at harmonizing international securities and accounting rules do not lead to diminished protections, but rather improved safeguards for U.S. investors. This is particularly critical given that no other country's market enjoys comparable participation by retail investors, or the benefits and responsibilities that brings.
Learn more about Senator Reed's efforts to grow our economy and increase affordable housing.
Recent News:
Reed Votes to Extend Unemployment Insurance and Stimulate Economy
Senator Reed's Statement on Treasury's New Regulatory Blueprint
Reed Reacts to Bush's Speech on the Economy
Reed Urges Bush to Tap Oil Reserve to Help Lower Gas Prices at the Pump
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