These statutes reflect Congress’s conviction that it is best not to improvise the principles which will guide federal intervention in financial institutions. That is a principle that I believe is equally valid not only with respect to depositary institutions, but other systemically important financial institutions as well.
Now, as always, the SEC is working closely with the Department of the Treasury, the Federal Reserve, and the Federal Reserve Bank of New York among others to ensure that our regulatory actions contribute to orderly and liquid markets. In addition to the specific actions that the Commission staff took in connection with the Bear Stearns – JP Morgan transaction, the Commission’s broader work to address the subprime turmoil has involved nearly every major SEC division and office, and every area of emphasis.
It includes, among other things, monitoring the financial condition of securities firms, guarding against market abuses, assessing the performance and revising the rules for credit rating agencies, and clarifying the application of accounting rules concerning the restructuring of mortgages.
To coordinate the efforts of all of the Commission’s Divisions and Offices, Erik Sirri, the Director of the Division of Trading and Markets, is leading an agency-wide Subprime Task Force composed of senior leadership from each of the relevant disciplines within the SEC, including the Division of Enforcement.
The SEC’s mission – the protection of investors, the maintenance of orderly markets, and the promotion of capital formation – is more important now than it has ever been. The recent turmoil in credit markets has made this a particularly challenging time. We will continue to work not only within the SEC but in close cooperation with the Federal Reserve and our other regulatory counterparts to promote the continued health and vibrancy of our markets, the strengthening of investor confidence, and the economic growth to which our securities markets are so essential.Thank you again for this opportunity to discuss these important issues. I am happy to take your questions.
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