.jpg)
Good afternoon. It is a pleasure to be with you today. I’d like to thank the Exchequer Club of Washington for inviting me to speak on the need for comprehensive reform of over-the-counter (OTC) derivative markets.
Last year’s crisis marks a defining moment in our nation’s history. The crisis was a call to action for the Administration, Congress and market regulators to ensure that we do all we can to prevent the financial system from so undermining the economy and the wellbeing of the American public.
I speak to you today as someone who spent half my adult life working on Wall Street. I worked with talented individuals from around the world who operated at the highest levels of professionalism. The industry plays a fundamental role in pricing and allocating capital and risk in our economy. But being talented and working in a critical industry doesn’t mean that individuals can’t make mistakes or that the system is flawless. The crisis eased only through strenuous effort and some considerable good fortune. Now we must ensure that the risks generated by the financial sector are never allowed to push us so close to the brink again. Some may accuse us of overreacting and overreaching. But the worst financial crisis in 80 years demands the most comprehensive regulatory reform in generations.
Though there are certainly many causes of the crisis, I think most would agree that the unregulated OTC derivatives marketplace played a central role.
Just this morning, I testified before the Senate Agriculture Committee on the need for comprehensive regulatory reform of OTC derivatives markets. In the past few weeks, both the House Agriculture Committee and the House Financial Services Committee passed historic legislation to introduce regulation to these markets. The Senate Banking Committee is working on similar reform.
Click here for full remarks.
