Hearing of the Senate Banking, Housing, and Urban Affiars Committee

SEN. SHELBY: Senator Crapo.

SEN. MIKE CRAPO (R-ID): Thank you very much, Mr. Chairman. I'll be brief also.

A number of the members of the committee, both Democratic and Republican, have clearly identified the problem and indicated how strongly they feel about it, and I share their concerns. My focus today in the hearing is going to be on whether we've solved the problem and what we need to do from here to make sure that we have.

Consumer confidence has been raised by a number of people, and clearly that is the end result that we want to achieve here. We want to have that strong market that America is proud of, and we want to make sure that Americans can duly be confident in that market so that they can start making the kinds of investment decisions that will help bring us back to a strong recovery. And we all know the parade of events that have occurred over the last few years that have seemingly repeatedly shocked the confidence of the American people, and in our markets. And just as we get to the point where we think okay, maybe we're going to be able to start recovering now, we have yet once again another shock.

Last year we dealt with the issues raised in Sarbanes-Oxley to make sure that the financial information which listed firms are reporting is accurate, and now we're dealing with the question of whether what is done by analysts in investment firms with that financial information is accurate or manipulated. And it seems that in one context or another, we continue to have these hits, which I believe it's this committee's responsibility and duty through these oversight hearings, to evaluate and make certain that we deal with correctly. We want to make sure that we have the correct statutory and regulatory systems and procedures in place, and the correct self- governing procedures in place to make certain that these kinds of things don't continue to happen.

I'm also going to be interested as we go through the hearing to be looking at the remedy sides of things. Has there been a complete disgorgement of illicit profits obtained, of is it going to turn out that after all we are doing and saying and talking about this $1.4 billion figure and so forth that it still would be profitable to engage in the activities that are the issue of the day. And if that's the case -- and I realize we have class action lawsuits that may be another aspect of this -- but if it's the case that it's still going to be profitable to engage in this kind of conduct when the day is done, then I don't think we've done our business, and we need to pay attention to the remedy here as well.

And, you know, a number of us -- as Senator Bunning most eloquently -- have talked about the concept of independence, or as Senator Bunning talked about the walls that need to be established, I'm going to be looking to see whether we have truly put into place and are headed toward achieving the kind of independence in this, and the kind of the analysis of financial information and the recommendations that are made with regard to the stocks that are traded, that make it clear that that advice can be relied upon, and that -- whether it's a Chinese wall or whatever other kind of wall, that that independence is firmly established.

There are a number of other remedy issues as well, but as I said, Mr. Chairman, my focus today is going to be on making certain that we do our part to be sure that the statutory, the regulatory and the self-governing systems that need to be in place are in place, that they are effectively enforced, that the incentives for taking profit out of this kind of conduct are removed, and that we do everything that is necessary to restore the confidence throughout the world in our markets.

Thank you, Mr. Chairman.