U.S. Rep. Paul E. Kanjorski, who represents Carbon County in Washington, wants to make sure American taxpayers are no longer on the hook for bailouts of large financial companies like had happened about a year ago.
In fact, the veteran lawmaker late last week successfully amended the Financial Stability Improvement Act that would empower federal regulators to rein in and dismantle financial firms that are so large, inter-connected, or risky that their collapse would put at risk the entire American economic system, even if those firms currently appear to be well-capitalized and healthy.
Kanjorski is the chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. As a national leader in the House, he utilized his influence to get his amendment to pass on a 38-29 vote, his leadership having caught the attention of business leaders from around the country, including Harvard law School.
The congressman was in New England today, where he was the keynote speaker in the Harvard Law School's International Finance Seminar guest lecture series, speaking on his initiative to address financial companies that are "too big to fail" and his efforts in Congress to reform the regulatory structure of the financial services industry.
"The passage of my amendment marks a crucial step for the American people and for the protection of our financial system," said Kanjorski. "I remember the dire situation we faced last fall, and we want to do everything we can to avoid such a situation in the future. Looking forward, we have the capabilities to try to act in a preventative manner for the sake of every American and our economy. Most of us yearn for the day when the phrase 'too big to fail' is no longer a part of our vocabulary. Through responsible action advocated in this amendment, we can make that a reality."
Kanjorski's efforts have put him at the forefront of financial reform in the nation. In addition to speaking today at Harvard, he appeared on CNBC last week to talk about the amendment. In addition, the importance of his initiative has been prominent in articles from the New York Times and Washington Post.
"It is an honor to be invited to speak as the keynote speaker at this lecture series," said Kanjorski. "I look forward to discussing the current state of the economy and where we have come since last fall. I also intend to prompt conversation on my amendment which would prevent companies from becoming 'too big to fail.' Because of this amendment, American taxpayers would no longer be on the hook for bailouts, as companies would not be able to become too big to fail and would not have the capabilities of causing serious harm to our economy as they have done in the past year. As I work in congress to pass legislation to reform the regulatory structure of the financial services industry, I am very pleased that this amendment as well some of my other pieces of legislation addressing financial services regulatory reform have passed in the Financial Services Committee. I look forward to moving them forward to the House floor."
The Kanjorski amendment expands on a segment of the Financial Stability Improvement Act by enabling federal action to address financial companies that are deemed 'too big to fail' before resolution authority is needed. The amendment transfers such mitigatory action from the Federal Reserve to the Financial Services Oversight Council and establishes objective standards for the Council to effectively evaluate companies to determine whether they are systemically risky. Additionally, the amendment provides clear checks and balances by requiring the council to consult with the president before taking extraordinary mitigatory actions.