Financial Chiefs Say Cooperation Key To Implementing Wall Street Reform

The heads of nearly every major federal regulatory agency told members of the Senate Banking Committee on Thursday that they are working together to slowly craft new rules that will govern the way the nation’s private financial sector operates.

Federal Reserve (Fed) Chairman Ben Bernanke said cooperation between agencies is crucial to successfully implementing provisions within the Wall Street reform bill that was passed earlier this year.

“It is essential that the (law) be carried out expeditiously and effectively,” Bernanke said. “Coordination’s going to be extremely important.”

Bernanke was joined on Capitol Hill by SEC Chairwoman Mary Schapiro, FDIC Chairwoman Sheila Bair and Deputy Treasury Secretary Neil Wolin. As part of the new law, the group will meet weekly with Treasury Secretary Tim Geithner to examine the stability of the financial sector.

Over the course of the next few weeks, the agency heads will collaborate on writing new rules that will dictate the behavior of big financial companies nationwide. Specifically, one of their duties will be to identify and monitor so-called “too big to fail” firms.

Is The Recovery Act Really Helping?

By Celia Canon- Talk Radio News Service

Secretary of the Treasury Timothy Geithner

Treasury Secretary Timothy Geithner testified on the financial situation and on the American Recovery and Reinvestment Act today.

Geithner said that “There are important indications that our financial system is starting to heal.”

Signs that we are on the right path include ”New securities issuance has started to revive, Spreads for AAA credit card receivables asset-backed securities (ABS) have fallen about 330 basis points from there peak. There has been more issuance of consumer ABS in the past two months than in the preceding five moths combines,” said Geithner.
loans of similar types, duration and interest rates.”

Starting with the subprime mortgage crisis in 2007, “Unexpected losses experienced by major banks on mortgage-back securities set off a vicious cycle” as Geithner describes.

As a result, the government implemented the American Recovery and Reinvestment Act (ARRA) in February 17, 2009.

The act provides transparency and accountability so that taxpayers know where every dollar is going. Additionally, the ARRA “is giving 95% of working Americans a tax cut, creating or saving 3.5 million jobs, providing nearly 4 million students with a new higher education tax and helping 1.4 million Americans purchase their first home by providing $6.5 in tax credits,” said Geithner.

In terms of lending, which was significantly cut as banks lost their capital, Geithner said “The recovery program included any substantive increasing guarantees and a reduction in fees for small businesses lending programs, and we’ve seen lending under those programs increase 25% since the Recovery Act was passed.”

Sen. Christopher Dodd (D-Conn.), Chairman of the Senate Banking Committee, mitigated these arguments by saying, “I think the picture remains mixed after losing some 5.1 million jobs since the recession began.”

Geithner concurred, and added “In many parts of the country, many people don’t feel it’s getting better yet, they don’t really feel that the availability of credit is improving.”

“Treasury is continuing to look into additional metrics that gauge the markets more broadly, as well as additional economic metrics, to determine the effectiveness of the current strategy and whether additional or different steps are needed,” Geithner said.

Taxpayers demand to know where the money went

"Not only is the money being used in ways that Congress did not intend but we do not have the transparency that was promised" said, Senator Jim Bunning (R-KY)

Today the US Senate Committee on Banking, Housing and Urban Affairs held a full committee hearing on the Troubled Asset Relief Program (TARP). Witnesses were present to give their testimonies. The purpose of this hearing was to explore how the program could be more effective while addressing the current issues of the financial crisis. TARP was initially created last October as part of the Emergency Economic Stabilization Act. Chairman Christopher Dodd (D-CT) indicated that Congress granted the Treasury 700 billion of tax payer dollars to aid the economic crisis, however; serious concerns were addressed regarding the misuse of this money due to gaps in Treasury monitoring. Future concerns regarding 350 billion dollars was also critically addressed for the sake of restoring the public's confidence in government spending.

"So many Americans losing their homes, their jobs and their healthcare. That kind of abuse of taxpayer money is offensive" said, Senator Robert Menendez (D-NJ)

By Candyce Torres, University of New Mexico-Talk Radio News Service

The Economic Crisis: Failed Government Regulation and Racial Scapegoating

“The evidence is overwhelming. This crisis is a direct consequence of years of regulatory failures by government officials” said Senator Christopher Dodd (D-Conn.) Dodd continued, “the dominant players were not Fannie and Freddie, but the Wall Street firms and their other private sector partners; the mortgage brokers and the unregulated lenders”. At the U.S. Senate Committee on Banking, Housing, and Urban Affairs hearing on “The Genesis of the Current Economic Crisis”, the overall consensus of Senators and panel members was that government regulation failures and Wall Street investors were to blame.

Dodd said, “no one can say that the nation’s financial regulators were not aware of the threats posed by reckless sub-prime lending to homeowners, communities, and indeed the entire country. That threat had already been recognized by Congress”. Senator Robert Casey (D-Pa.) said he was troubled by the fact the Treasury Department wants to commit $250 billion to aid banks without “planning to modify a single loan”. Casey suspects that banks are now holding back on modifying loans because they’re waiting to see if they can sell them to the Treasury Department first, which he believes is the worst things that can happen right now.

The Honorable Marc H. Morial, President and CEO of the National Urban League, said that he wanted to, “set the record straight about what I call the Financial Weapon of Mass Deception: the ugly and insidious and concerted effort to blame minority borrowers for the nation’s current economic straits”. Morial blamed a few conservative reporters such as Fox News’ Neil Cavuto and the Washington Post’s Charles Krauthammer for, “telling the world that this crisis in not the result of a failure of regulation, but the fault of minority borrowers who bit off more than they could chew”. Morial said, “while minorities and low-income borrowers received a disproportionate share of sub-prime loans, the vast majority of sub-prime loans went to white and middle and upper income borrowers.”

Obesity is everyone’s problem

The Senate Health, Education, Labor and Pensions Committee held a hearing today on “Childhood Obesity: The Declining Health of America’s Next Generation.” Sen. Christopher Dodd (D-Conn.), called the “champion of children” by Sen. Thomas Harkin (D-Iowa), presided over the hearing and said that the childhood obesity epidemic is one of the most urgent threats to American children. Dodd explained that “our children’s generation” may be the fist in the modern era to live shorter, less healthy lives than their parents. He also said that nearly one out of every three American children are obese or are at risk of becoming obese and children are increasingly being diagnosed with type 2, “adult-onset” diabetes, high blood pressure, and high cholesterol.

Dodd said that childhood obesity is a problem that “affects all of us,” and “we’re all going to be paying the bill.” He explained that the obese spend thirty six percent more on health care and seventy seven percent more on medications. According to Dodd, everyone - parents, schools, governments, employers - needs to see the rising childhood obesity rates for what they are: a medical emergency.

Jeffery Levi, the Executive Director for Trust for America’s Health, said that approximately twenty three million children are obese or overweight in the U.S., and rates of obesity have nearly tripled since 1980. He explained that the U.S., as a nation, needs a cultural shift in which healthy environments, physical activity and healthy eating become the norm. Francine Kaufman, a past national president of the American Diabetes Association, said that obesity has reached epidemic proportion in the U.S. Kaufman also said that during the mid-1990s, type 2 diabetes in youth increased ten-fold and mirrored the childhood obesity epidemic. She explained that there is no doubt that obesity in youth, along with its associated medical conditions, is the major health challenge of this century, and more needs to be done to combat it.

Margaret Grey, dean and professor of the Yale School of Nursing, said that this obesity epidemic in youth threatens not only the future of children with chronic diseases and a decreased lifetime, but the epidemic is multi-faceted and will ultimately affect the workforce and thus the economy. Grey explained that obesity and diabetes have physical complications - cardiovascular disease, kidney disease, blindness, and amputations - as well as complications related to quality of life - depression and academic achievement. She also said that this generation of youth cannot survive if Congress continues to pay for the care of their heart attacks, but not for the intensive behavioral care that it will take to reverse the epidemic.