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Senate Proceeding on Jul 15th, 2010 :: 3:22:40 to 3:29:30
Total video length: 9 hours 2 minutes Stream Tools: Stream Overview | Edit Time

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Judd Gregg

3:22:33 to 3:22:53( Edit History Discussion )

Judd Gregg: that will cause a contraction in my opinion. the estimates estimates are as high as three-quarters of a trillion dollars. on t top of that you have the issue of the new capital rules in this bill. now, it really isn't constructive for the congress to set arbitrary capital rules.

Judd Gregg

3:22:40 to 3:29:30( Edit History Discussion )
Speech By: Judd Gregg

Judd Gregg

3:22:54 to 3:23:14( Edit History Discussion )

Judd Gregg: that should be left to the regulators. but this bill pretty much does that. as a result a lot of the middle-sized banks, not the larger banks, but the middle-sized banks will fine that they're under tremendous pressure as the tier one capital has to be restructured. and this is not a good idea. it is ju

Judd Gregg

3:23:15 to 3:23:35( Edit History Discussion )

Judd Gregg: as a practical matter you're going to cause a contraction in the market of capital, of credit as banks grow their capital, they're going to have to contract credit. when a bank -- when a bank has to get money back in order to build its capital position up, it doesn't go to its bad loans. the bad loans aren't performing. it goes to its good loans.

Judd Gregg

3:23:36 to 3:23:58( Edit History Discussion )

Judd Gregg: and it doesn't lend to them or it says we're going to draw down your line of credit. get capital in. and that's what will happen. we'll see capital are contract there. on top of volcker rule, in concept, it's a good idea. should never be allowed -- you should notave banks using

Judd Gregg

3:23:59 to 3:24:19( Edit History Discussion )

Judd Gregg: insured deposits to do propriety activity. straining out what this volcker rule means wil take a while, it will take a year or two years before anybody can sort it out and what it really means and for the regulation that's come down to define it. you will have period of uncertainty and this leads to less credit available and this is a situation where the international banks were the

Judd Gregg

3:24:20 to 3:24:41( Edit History Discussion )

Judd Gregg: winners and the domestic banks are the losers because the international banks are going to be able to go and do the same business, the propriety trading in london or if they're based in singapore in they're based in singapore, or tokyo if they're based in tokyo, but the american banks with which they compete with are not going to be able to do it.

Judd Gregg

3:24:42 to 3:25:04( Edit History Discussion )

Judd Gregg: as a practical matter that's what this bill does. we will end up with a tentativeness in the markets as to what they're supposed to be doing and what they can do in the area relative to the volcker rule and this is going create further credit contraction. my guess is when you add it all together this bill will lead to a credit contracti probably $1 trillion or more in our -- in our economy.

Judd Gregg

3:25:05 to 3:25:25( Edit History Discussion )

Judd Gregg: what does that translate it translates into fewer jobs, lesser economic activity and it didn't have to happen this way. i mean, this could have been donen a way that would have been clearer, where the clarity would have been greater and where you would not have had to take arbitrary action which is more political than substantive to address the problems of our

Judd Gregg

3:25:26 to 3:25:47( Edit History Discussion )

Judd Gregg: industry which did exist and should have been addressed. another area of concern is this consumergency. consumer protection is critical. we all agree to that. what we propose on our side of the aisle was that you link consumerrotection and safety and soundless at the same -- soundness at the same level of responsibility and in the same level of authority within the

Judd Gregg

3:25:48 to 3:26:09( Edit History Discussion )

Judd Gregg: entire bank regulatory system. so that the prudential -- the regulator when they regulate a bank and check it for soundness they have the same standard of importance placed on making sure that the consumer is protected in the way that that bank deals with the consumers. that's the way it should be done.

Judd Gregg

3:26:10 to 3:26:30( Edit History Discussion )

Judd Gregg: what this bill did, linked the two, because the regulator that regulates the bank for safety and soundness is the logical regulator to regulate the bank to make sure they're complying with csumers' needs. what this bill does is sets up a brand-new agency, which it calls consumer protection, which won't be at all in my opinion.

Judd Gregg

3:26:31 to 3:26:54( Edit History Discussion )

Judd Gregg: it will be the agency for political correctness or correcting socially political justice, issues of political justice that somebody's concerned about. and it everybody else. it doesn't answer to anyone except on a very limited and

Judd Gregg

3:26:55 to 3:27:16( Edit History Discussion )

Judd Gregg: narrow way to the systemic risk counselle. it is a -- council. it is a single person with a an $850 million -- million dollarnoversighted revenue stream, no appropriations, basically the person just gets

Judd Gregg

3:27:17 to 3:27:38( Edit History Discussion )

Judd Gregg: the money and can go off and do whatever they want. well, there's no relationship between this person and the prudential regulator, so what you're going to have here is an individual who may get on cause of social justice that says, x, y, z group isn't getting enough loans and they say, all right, you have to send

Judd Gregg

3:27:39 to 3:28:02( Edit History Discussion )

Judd Gregg: x, y, z's group more loan. you might have the local regulator saying to the local banks, regional banks, you can't lend to x, y, z group because we know they're not going to pay you back or they're not going to pay back at a rate that's reasonable. and so you're going to have this inherent conflict. what's going to be the result of that? well,he banks will probably

Judd Gregg

3:28:03 to 3:28:23( Edit History Discussion )

Judd Gregg: have to lend tohe x, y, z group, which means the people who are bore heoing from that bank and will pay their banks back will have to pay more because the bank has to make up for the lost of revenues. as a result the cost of credit will go up, especially for individuals who are responsible in paying down their debts and paying for their credit, paying back their loans and you will

Judd Gregg

3:28:24 to 3:28:45( Edit History Discussion )

Judd Gregg: end up with layer yes and layers -- layers an layers of con flingting regulation, -- conflicting regulation, which will cost the bank significant unnecessary money. who will pay for that? you pay for it. the consumer paysor it. clearly it passes through. this is one of the goldberg

Judd Gregg

3:28:46 to 3:29:06( Edit History Discussion )

Judd Gregg: ideas that come out of a government entity. they say, you know, the government produces a -- a camel when it is supposed to be producing a horse. there's just -- jus a disconnect between the reality of what you're supposed to be doing in the area of producing effective regulation relative to protecting consumers and what

Judd Gregg

3:29:07 to 3:29:29( Edit History Discussion )

Judd Gregg: this bill finally ends up doing and what i suspect -- and i won't be here to oversee it or participate in it -- nobody gets to oversee it. it is not responsible to the banking committee of the senate or the banking committee of the house. it's not responsible to t fed. th

Judd Gregg

3:29:30 to 3:29:31( Edit History Discussion )

Judd Gregg: the term czar is thrown around a

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