Internet caucus taking a look at internet privacy and personal data protection. The chair of the Federal Reserve, janet yellen, testified on the u. S. Economy and Monetary Policy appearing before the House Financial Services committee on wednesday for about three hours. The committee will come to order. Without objection the chair is authorized to suggest a recess for the committee at any time. This is the annual testimony on the Federal Reserves supervision and regulation of the Financial System. I now recognize myself for three minutes to give an opening statement. The dodd frank act requires the Federal Reserves vice chair of supervision to testify before our Committee Twice a year regarding the supervision and regulation of Financial Institutions. Regrettably, five years after the passage of dodd frank, no such person exists. President obama has been unwilling or unable to follow the law in a point at vice chair. We can no longer wait for the president to do his job so we can be al
Financial institutions and markets generally. Those powers we use during the crisis to keep credit flowing to the economy. Sure. And so we want to be very careful about what we do. The words used for that are unusual and exjentsisheses. Sur correct. In my format we take that and we say we add upon it, raise the bar marginally, i would argue, and use the language unusual and exjent circumstances exist that pose a threat to the Financial Stability of the United States. Youve come out and some of the other fed governors come out opposed to that language. Why . Thats when we would use im not sure that we have been opposed. Thats when we would use those powers when there are unusual and exjent. Its understood to mean pose a risk to the Financial System. Weve kind of added two things as a belt and suspnders. One was to include the language that pose a threat to the financial starblete to the United States. And that is the pushback that weve gotten. Ive met with some of the other fed governor
Provide liquidity when there is a financial panic and lenders are worried about the state of Financial Institutions and markets generally. Those powers we use during the crisis to keep credit flowing to the economy. Sure. And so we want to be very careful about what we do. The words used for that are unusual and exjentsisheses. Sur correct. In my format we take that and we say we add upon it, raise the bar marginally, i would argue, and use the language unusual and exjent circumstances exist that pose a threat to the Financial Stability of the United States. Youve come out and some of the other fed governors come out opposed to that language. Why . Thats when we would use im not sure that we have been opposed. Thats when we would use those powers when there are unusual and exjent. Its understood to mean pose a risk to the Financial System. Weve kind of added two things as a belt and suspnders. One was to include the language that pose a threat to the financial starblete to the United S
The economy. The other thing is, if you act too soon and you decide, oops, we acted too soon, you get you put yourself in a position where you have a zigzag policy and you will face criticism from that by people i know. Second, if you then want to go in the other direction, you only have a quarter point to play with. If you hit the brakes too soon, you dont have gas. With that in mind, im concerned about the effect raising Interest Rates now would have on the real estate recovery and i would ask you what you would think the impact would be of raise zing Interest Rates on the housing recovery and would we squeeze credit worthy borrowers out of the Housing Market and create a negative feedback loop with prices going down . So, you have made very large number of very good points and indicated many relevant considerations that the committee is trying to weigh and balance and has been taking into account. With respect to the Housing Market, of course the level of Mortgage Rates is relevant
If its my friends at the fcc, first of all, i wouldnt be shocked. And second of all, maybe thats a pretty fair thing. Have you done what you need to do to get this regulation, required by law, simply to allow us to know the incentive that is are involved and to prohibit inappropriate incentives that did help lead to the 2008 debacle. Have you done your job . We have tried to work constructively with the other agencies. I love when chairs never give answers. We have done i think the fed has done a pretty good job. Im not complain 00 the fed. But this is long overdue. Each regulator that comes before me, im going to ask. I dont say do a specific item, i dont care how much they make. Do it so the american person doesnt get on the hook again. On an item that we have already identified as a problem that everybody agrees was a problem and that should be relatively easy to fix. I agree with your assessment, that it was an important problem, that it is essential to address it. And as i said, i