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Senate Proceeding on Apr 20th, 2010 :: 0:28:10 to 0:39:15
Total video length: 2 hours 40 minutes Stream Tools: Stream Overview | Edit Time

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Judd Gregg

0:28:06 to 0:28:26( Edit History Discussion )

Judd Gregg: reach within 70% of the american people. madam president, floor. a senator: madam president? the presiding officer: the senator from new hampshire. mr. gregg: madam president, i want to rise to talk about the same georgia has just discussed. and first, i want to congratulate the senator from georgia, and this is the point that we've been making on our side of the aisle. he's come up with a very thoughtful and appropriate way

Judd Gregg

0:28:10 to 0:39:15( Edit History Discussion )
Speech By: Judd Gregg

Judd Gregg

0:28:27 to 0:28:47( Edit History Discussion )

Judd Gregg: to address what was one of the core drivers of our fiscal meltdown in this country. if you look at what caused the financial crisis of late 2008, which has caused this significant recession, which has caused us to go through all these expenditures as a government and which has caused so many american people to have to suffer the consequences of this recession, there were three

Judd Gregg

0:28:48 to 0:29:08( Edit History Discussion )

Judd Gregg: or four major events that generated this. one was money was too cheap for too long. that was a federal reserve decision. but right at the essence of it was the issue of underwriting, the fact that there was a decoupling of the people who were making the loan from the people who were responsible for the loan. and you had this whole service

Judd Gregg

0:29:09 to 0:29:29( Edit History Discussion )

Judd Gregg: industry built up that was making money off of the fees that -- for originating the loan and really weren't that concerned about the ability of the person to repay the loan or the underlying asset. what the senator from georgia has pointed out in the proposal that he's brought forward is a very responsible way to address this fundamental problem which

Judd Gregg

0:29:30 to 0:29:50( Edit History Discussion )

Judd Gregg: we have, which is the failure of underwriting. and that's the point we've been making on our side of the aisle. that we have a whole series of what we think are pretty good eas as to how you can make financial reform work better.? now, i was impressed -- and certainly one of them is the idea of the senator from

Judd Gregg

0:29:51 to 0:30:11( Edit History Discussion )

Judd Gregg: georgia. i was impressed to hear both leaders say that they want to that's comprehensive, that's thoughtful and that the issues which we confront in this regulatory arena. unfortunately, that's not the atmosphere around here that has been created. regrettably, there has been a huge amount of hyperbole,

Judd Gregg

0:30:12 to 0:30:34( Edit History Discussion )

Judd Gregg: especially in the last couple of weeks. most of it has not been directed at moving down a path of thoughtful and mature and substantive approach to this issue. most of it has been addressed at raising anecdotal events which have then been hyperbollized into single one liners as to how you address them. well, this issue of financial

Judd Gregg

0:30:35 to 0:30:55( Edit History Discussion )

Judd Gregg: reform is far too complicated for one that's just a fact. it's an extremely complex undertaking, to make sure that we accomplish what we need to accomplish in a regulatory reform. our goal should be two. first we should do whatever we can to restructure the regulatory arena so that we

Judd Gregg

0:30:56 to 0:31:16( Edit History Discussion )

Judd Gregg: reduce to the greatest extent possibly the potential of another systemic risk event. i'll talk about what we need to do in that area in a second. and second, while we're doing that, we have to make sure that the regulatory environment that we put in place keeps america as the best place in the world to create capital and get a loan for people who are willing to go out, take a risk, be

Judd Gregg

0:31:17 to 0:31:37( Edit History Discussion )

Judd Gregg: entrepreneurs and create jobs. you know, one of the great uniquenesses of our culture, what makes us different from so many other places in this world, what makes our -- ges us such vibrance and energy as an economic engine that we have people whore willing to go out and take risks. we have people who are willing to be entrepreneurs.

Judd Gregg

0:31:38 to 0:31:59( Edit History Discussion )

Judd Gregg: and we have a system of capital formation and credit which makes capital and credit readily available to those individuals at reasonable prices. and so as we go down this road of regulatory reorganization, we have to make sure we don't suffocate that great strength of our nation. and so there are four basic

Judd Gregg

0:32:00 to 0:32:21( Edit History Discussion )

Judd Gregg: issues before us today in the issue of regulatory reform, and none of tm are bipartisan. yet the atmosphere around here, you would think they are all partisan, especially the president's recent speech which was really over the top in his partisan dialect. the first is how you end too big to fail. now, we cannot allow a system to

Judd Gregg

0:32:22 to 0:32:43( Edit History Discussion )

Judd Gregg: exist where there is a belief out there in the markets that the taxpayers are going to back up a company that has taken too many risks and has gotten itself in trouble. why is that? because in that happens, if there is a belief in the market that the taxpayers will step in and back up companies that are ve large and systemi when

Judd Gregg

0:32:44 to 0:33:05( Edit History Discussion )

Judd Gregg: they have taken too much risk and created -- put themselves in dire economic straits, that is there a belief the taxpayer is going to step up and back that company up. capital will be averted. capital will not be efficiently used. capital will flow in an inefficient way to companies which have proved themselves to not be fiscally responsible, and

Judd Gregg

0:33:06 to 0:33:27( Edit History Discussion )

Judd Gregg: that's not a good way for an economy to market economy to function. and so we have to end too big to fail. now, this isn't a partisan debate. senator dodd has brought forward a bill which he thinks ends too big to fail. in my view, it doesn't. it has some serious flaws. it's a good attempt, but it doesn't get there.

Judd Gregg

0:33:28 to 0:33:48( Edit History Discussion )

Judd Gregg: senator corker and senator warner, two parties, two different parties, have actually put together a concept -- we call it resolution authority around here -- which actually does end too big to fail and does it the right way. it essentially says if a company -- if an entity gets -- which is a huge entity gets out of whack, overextends itself, gets too much risk, no longer

Judd Gregg

0:33:49 to 0:34:10( Edit History Discussion )

Judd Gregg: viable, well, then we're going to resolve that company. the stockholders will be wiped out, unsecured bondholders will be wiped out and the company will basically flow into bankruptcy and will not be conserved, will not be conserved. so that's a good approach and it's a bipartisan approach. another big issue, how you address regulatory oversight to

Judd Gregg

0:34:11 to 0:34:31( Edit History Discussion )

Judd Gregg: try to anticipate a systemic event. well, again, the dodd bill makes an attempt in this area, but ere are ways we can improve it. we need to have all the different regulators who are -- who have an important role in this sitting at a table, most likely led by the fed who will take a look at the broad horizon and what's happening in the marketplace and say oy, in

Judd Gregg

0:34:32 to 0:34:52( Edit History Discussion )

Judd Gregg: this area we have a problem arising. we have too many people doing too many things whichre at the margin of responsibility here. we're going to empower the agency which is responsible for that, the fdic or the o.c.c. or one of the other regulatory agencies to go out and make sure that that activity ceases or is abated, and they are going to come back and report to us so that you have some oversight

Judd Gregg

0:34:53 to 0:35:14( Edit History Discussion )

Judd Gregg: here. that's the concept. it can be fleshed out inetter terms. and it goes to this issue which is raised by the senator from gegia, which is we should have better underwriting standards as part of this exercise, so that in the marketplace, real estate especially, residential real estate, we get back to the approach that we should have taken to begin with, which is we

Judd Gregg

0:35:15 to 0:35:35( Edit History Discussion )

Judd Gregg: know that the asset value that's being lent to exists and that the person can pay the loan back as the asset -- as the loan is adjusted over the years. thirdly, we have got the issue of derivatives. derivatives are -- are a huge

Judd Gregg

0:35:36 to 0:35:57( Edit History Discussion )

Judd Gregg: part of the market, massive. the number $600 trillion of value, something like that. just massive numbers. what do they do? they basically make i possible for american companies especially to sell their products around the world or to take and put their products into the market in a way that they

Judd Gregg

0:35:58 to 0:36:19( Edit History Discussion )

Judd Gregg: are able to address issues which they don't have control over. for example, if you're caterpillar equipment and you're selling something in china, you don't know if the currency is going to -- well, you do with china. that's a bad example. if you're selling something in brazil, you don't know if the currency value is going to change. you don't know if there is going

Judd Gregg

0:36:20 to 0:36:41( Edit History Discussion )

Judd Gregg: to be a change in the cost of your materials that you're building that tractor with. you don't know -- a lot of different factors you don't have control over. derivatives allow you to insure over that. that goes to lots of different financial activity, all the way across the board to producers of goods. so there needs to be a regime

Judd Gregg

0:36:42 to 0:37:02( Edit History Discussion )

Judd Gregg: put in place that makes these derivatives sounder, where we don't get an a.i.g. type of situation. we're basically backing up to what amounts to an insurance policy was a company with a name but actually no assets. and so myself and reed working for months, literally months on a daily basis to try to work out such a regime, and

Judd Gregg

0:37:03 to 0:37:24( Edit History Discussion )

Judd Gregg: we think we're pretty close. we think it's going to be a good proposal. nobody is going to like it which we know means it will be a good proposal. but it will accomplish what we want to do which is get more transparency, more margin in the market. there will be the opportunity to have end users who are but there will also be a primary incentive to p

Judd Gregg

0:37:25 to 0:37:45( Edit History Discussion )

Judd Gregg: clearinghouse, and to the extent can you move from a clearinghouse to an exchange, that will happen also, without underming the market. but the key here is to put in place a regime which doesn't force companies to go overseas to do their derivative activity. this is a very fluid event. if we come forward with an

Judd Gregg

0:37:46 to 0:38:06( Edit History Discussion )

Judd Gregg: overly regressive approach here and an overly bureaucratic approach, one that basically pontiacs to the hyperbole of the moment which is that all derivatives are bad and not transparent and therefore must be put on exchanges, something like that, we're basically going to push offshore the vast amount of derivative activity. that is critical to our industry in america being competive. really, as a very practical

Judd Gregg

0:38:07 to 0:38:27( Edit History Discussion )

Judd Gregg: matter, if we can develop a sound market, we want to be -- and we can develop a sound market, we want to be the nation where most people go to develop their derivatives, because it is a big industry and something we should keep on shore. third issue, consumer protection. time is u fourth issue. the presiding officer: the

Judd Gregg

0:38:28 to 0:38:49( Edit History Discussion )

Judd Gregg: senator has used ten minutes. mr. gregg: i see where the senator from louisiana wants to speak. but the point here is pretty obvious. this is not a bipartisan issue. we can resolve the issue of financial regulatory reform if we sit down and do it in a constructive, thoughtful way. step back, be mature, and take an approach that's thoughtful versus wrapped in hyperbole and

Judd Gregg

0:38:50 to 0:39:12( Edit History Discussion )

Judd Gregg: populism of the moment, and i certainly hope we'll takehat process and go forward.

Judd Gregg

0:39:13 to 0:39:15( Edit History Discussion )

Judd Gregg: i yield the floor. mr. the presiding officer: the senator from louisiana.

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