Congressman Tom Price (R-GA) issued the following statement in response to reports that the Obama administration is planning to propose new limits on the size and risk of private financial institutions.

“The President has clearly not learned the lesson that was delivered this week: Americans are sick of his big-government solutions,” said Congressman Price. “It is folly to believe that Washington can decide what represents the proper amount of risk in the private sector. Markets determine risk, not bureaucrats, and any limits the administration places would be arbitrary ones. This antiquated proposal represents a complete misunderstanding of the cause of our financial crisis. Breaking up banks will not impact risk-taking, but instead will hurt consumers who expect America to have an efficient 21st century financial system.

“The fact is those investment firms that failed did not engage in commercial banking, meanwhile, those banks that failed we’re heavily invested in mortgage securities. All signs point to Fannie Mae and Freddie Mac, yet Democrats continue to drive our economy with blinders on. Excessive risk-taking was not caused by a lack of regulation; it was a lack of consequences. Democrats have promoted costly federal guarantees, backstops, and bailouts that have allowed institutions to disregard market discipline, knowing taxpayers would always be there to pick up the tab.

“This proposal will do nothing to get to the heart of our problem. Unless we stamp out irresponsible federal intervention and take on Fannie and Freddie, this plan will do nothing but turn a few large companies taking excessive risk into many smaller ones doing the same thing.”