Perspectives on Systemic Risk

Thursday, March 5, 2009, 10:00 a.m, 2128 Rayburn House Office Building
Capital Markets

 Kanjorski Convenes First Systemic Risk Hearing

Washington, DC – Congressman Paul E. Kanjorski (D-PA), Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, today announced that the Subcommittee will hold the first in a series of hearings to examine how to improve the ability of the government to prevent private sector activities from putting at risk the stability of the U.S. economy.  The hearing will assist the Financial Services Committee in crafting legislation to create a systemic risk regulator for the financial services industry.

“The downfall of Long-Term Capital Management, the demise of Bear Stearns, the collapse of Lehman Brothers, and the unprecedented governmental assistance provided to American International Group are just a few examples of how the financial services industry can create systemic risk that endangers the broader economy and affects the daily lives of average Americans.  Many of our financial institutions have become too-big-to-fail or too-interconnected-to fail, and we need to protect the American economy from the whirlpool of risks that they pose by putting in place a systemic risk regulator with vigorous powers and a strong mandate,” said Chairman Kanjorski.  “This hearing will focus on securities, capital markets, insurance, and credit default swaps issues, and it will help us to better define what systemic risk is and map out how we can protect against it.  President Obama recently called on the Congress to take swift action to establish a modern regulatory structure for the financial services industry, and creating a systemic risk regulator is the first step that we must take.  I am committed to moving expeditiously in the 111th Congress to achieve this goal.”