Geithner and Bernanke Visit Financial Services Liveblog (Thread the Third)
Hearing is on CSPAN3 and the committee thread. In addition to Geithner and Bernanke, the head of the NY Fed, William Dudley, is also here.
For my liveblog on the statements, go here (it’s mostly an excerpt of their statements).
For the first set of member questions, go here.
Last two rounds with Bernanke.
Baca: Foreign payouts?
BB: Many issues and concerns boil down to lack of resolution regime. Europeans have protected financial institutions. Need to work collaboratively.
Baca: What can be done now.
BB: Regulatory system not adequate. We didn’t see it. Resolution authorities. WRT getting money back. Again, put a lot of money into AIG. Good collateral.
Baca: Why not prepared. Through many parts of regulatory system, not prepared.
[Let me help you, Helicopter Ben: G-L-A-S-S-S-T-E-A-G-A-L-L]
Baca: When was it broken?
BB: OTS small agency specializes in thrifts.
[No mention that AIG was given option of whom to be regulated by]
BB: Larger better funded needed.
Baca: When was it broken?
BB: Many different aspects just proved in adequate.
Posey: Everybody is upset with a crisis of the day. Son of TARP, Grandson of TARP. Most businesses would approach this with a grand plan. Flow chart. where we want to go, how we measure, with contingencies. I think everybody would be so much more comfortable with a plan, and a timeline. We’ve got no roadmap for financial future of the country.
BB: I do think there’s a plan. Treasury has 5-point plan. That covers all the major elements to get banking system going again. Avoid AIG need to undertake financial reform program. Fed has proposals, I talked about last week. I think there is a plan. A lot of battles are chaotic until smoke clears. We can see the terrain.
Posey: I appreciate that. Hope that most battles are won with good plans. 5-point plan is a hail mary, and we hope to make a touchdown. If the receiver drops the ball, what are we going to do with that first plan. That’s what I haven’t seen unfold. We didn’t measure stuff properly.
Bernanke’s plan is to throw money at the problem, lots and lots of money.
Frank blathering on. He says that it wasn’t deregulation but non-regulation of new products that created the current mess. This is a variant of the “No one could have predicted” argument. It also profoundly untrue. Derivatives did not arise in the absence of regulation. They were specifically taken outside the realm of regulation. With CDSs this occurred under the CFMA. Large all purpose financial conglomerates didn’t just happen in advance of regulation. It took the repeal of Glass-Steagall under Gramm-Leach-Bliley to do it. Massive leveraging didn’t just happen either. It took the rescinding of the SEC’s capital reserve rule. Frank is engaging in revisionist history, i.e. lying.
Why do I have the impression that the guys who are ‘answering’ the questions are all either lying or tap-dancing around the real answers?
and congress people keep acting like they are surprised
Bachman sure is tap dancing “the American people deserve to know” She is kissing some ass….like her question
“who what where when” did they know
Damn I do not like it when that woman makes sense
Hope Bachmann stands by her cry for an “independent prosecutor” when it comes to BushCo, Cheney, torture, etc. Let’s hold her to that call for an “independent prosecutor” across the board