Ag Committee Considers Financial Oversight

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A Senate Ag Committee Hearing, held Wednesday, focused on the Financial Stability Improvement Act. Committee Chairman Blanche Lincoln called the issue - quite simply, the single most important factor in our long-term economic recovery. She said - it will be the foundation for our nation’s financial future. Senator Lincoln pointed out that deregulation – has simply devastated our economy. Therefore, - fundamental financial market oversight reform must pass. Reform is essential to reaffirm the integrity and soundness of our financial system.

In his opening statement, Ag Committee Ranking Member Saxby Chambliss noted, - the volatility that we have seen recently in some markets warrants extensive analysis, and possibly some regulatory changes. The Senator added, - I also believe this committee should explore how most effectively to regulate swaps, some of which are statutorily excluded from CFTC regulation and oversight. Chambliss said we can no longer ignore the complexities of these markets. We must devote time to understanding these instruments and their applications.

The bill’s language creates a Financial Services Oversight Council made up of several agencies - including the Commodity Futures Trading Commission - which would be given powers to identify certain financial players and activities that could pose a systemic risk to the economy. The Federal Reserve would be given broad powers in the draft, with the ability to impose standards despite the objections or expertise of Council member agencies. In addition, the draft contains loan retention provisions affecting the Farm Credit Administration, which oversees a nationwide network of borrower-owned lenders that provide credit and related services to farm country.