Swaps Regulatory Improvement Act

Floor Speech

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Mr. LYNCH. I thank the gentlelady for yielding, and I want to associate myself with her earlier remarks on this bill, as well as the remarks of Mr. Peterson of Minnesota.

Mr. Speaker, I rise today in strong opposition to H.R. 992, the misleadingly named Swaps Regulatory Improvement Act. If you need to know one thing about this bill, it is that a vote for this bill is a vote to provide taxpayer funding and backing for the kind of reckless derivative trading that brought our economy to the brink of catastrophic collapse. It is as simple as that.

The bill before us today would repeal the provision in the Dodd-Frank reform law that requires too-big-to-fail banks to push their risky derivative dealings out of banks that receive taxpayer support and into separately capitalized subsidiaries.

This bill is not a regulatory improvement. It is a giveaway to Wall Street, and it is an abdication of the duty of this body to protect taxpayers from Wall Street speculators.

I want to point out a couple of things that have been, I think, misleading here. Dodd-Frank already allows banks to keep derivatives that they use for bona fide hedging purposes or for traditional banking activities within the insured bank. Interest rate and foreign exchange swaps, which make up 90 percent of swaps volume, are the most likely to be used by end-users to manage their risk; and those are already exempt from the push-out under section 716. So end-users can already benefit from 90 percent of the swaps that are out there.

Moving risky derivatives activity outside of the insured banks will ensure that the risks to the banks--those that are traditional and measurable--and the speculative derivative risks, which are totally unmeasured and unexpected, those are not commingled, which make bank risks easy to understand for regulators and actually leads to better regulation.

Finally, I want to call my colleagues' attention to an article about this very bill that appeared yesterday in The New York Times on the front page of the Business section.

The SPEAKER pro tempore. The time of the gentleman has expired.

Ms. WATERS. I yield an additional 30 seconds to the gentleman.

Mr. LYNCH. I appreciate that.

Go read yesterday's New York Times. It says on the front page of the Business section, To Wall Street, Washington, D.C., ``might seem like enemy territory. But even as Federal regulators and prosecutors extract multibillion-dollar penalties from the Nation's biggest banks, Wall Street can rely on at least one ally here'' in Washington. And that ally is the House of Representatives.

We ought to change our position, stand with the taxpayers, stand with the investors, stand with the people that we were elected here to represent and tell Wall Street where to go on this. They get enough breaks as it is. We ought to stand up for the American people and protect them for a change.

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