ms. collins: madam president? the presiding officer: the senator from maine. ms. collins: madam president, i ask unanimous consent that proceedings under the call be dispensed with. the presiding officer: without objection. ms. collins: thank you, madam president. madam president, i ask unanimous consent that i be permitted to proceed as if in morning business for 15 minutes. the presiding officer: without objection. ms. collins: thank you, madam president. madam president, moments from

now president obama will unveil his administration's long-awaited proposal to restructure and reform our nation's financial regulatory system. i'd like to take a few minutes to share my initial reactions to some of the most important features in the president's plan. at the outset, madam president, let me say that the president and his financial team deserve considerable credit for tackling this critical issue. it's important that all of us recognize how critical federal financial regulatory reform is and that we not put this issue off until some distant future. when the pr*e present crisis is behind us -- when the present crisis is behind us, something

we all hope will be sooner rather than later, other issues will demand our attention and calls for reform, i fear, will begin to fade. if that happens, our financial system would remain flawed and these flaws must be corrected or they will emerge once again in the future to threaten our prosperity and to imperil our financial markets. in several aspects, the president's financial reform proposal parallels legislation that i introduced in march to fundamentally transform our nation's financial regulatory system. the bill that i introduced would create a council of financial regulators to act as the

systemic risk monitor. the bill would also require stronger safety and soundness standards and would close the loophole on the regulation of credit default swaps. it would eliminate the office of thrift supervision among other provisions. madam president, there's widespread consensus that we do need a system of -- a measure for reviewing systemic risk. we need to have one entity that is responsible for looking across the financial markets and financial institutions and to identify regulatory black holes and high-risk practices or products that could put our financial markets at risk. for this reason, i'm pleased that the administration is proposing the creation of a

council of regulators to ensure that any perspectives and areas of expertise are brought to the table. as we know now from bitter experience, we do not have currently any entity that is charged with eevaluating risk across the financial spectrum. and as a result, we saw institutions take on far more leverage than was appropriate. we saw exotic new derivatives that were poorly disclosed, not well understood and lightly regulated, if at all, develop over the last few years and imperil our financial markets. so it's critical that we have an entity -- and i believe a council of regulators is the

best entity -- to look across the financial markets rather than having each regulator view its regulatory responsibility and regulated entities through a narrow prism. to my mind, the president's decision to rely on a council model makes his proposal far more practical and effective than alternatives which would have required the restructuring of most or all of the financial agencies that currently oversee the financial system. the effort to achieve that kind of massive change and consolidation would take many years to implement. and as the experience in the united kingdom demonstrates, it would be no guarantee that our nation's economy would be shielded from systemic risk even

after such a consolidation were implemented. under the legislation that i've introduced, a financial stability council would be the primary entity responsible for detecting systemic risk and taking action to protect against that risk. well, i'm pleased that the president has chosen the council of regulators model as well, i differ with his proposal to have the secretary of treasury serve as the head of the council. instead i believe that the council's chairman should be independent of any of the regulatory agencies that are serving on the council and that it's important that that chairman devote his or her full energies to that role and not

have other important responsibility. it is also important that that individual be subject to congressional oversight, be presidentially appointed and senate confirmed. i do believe, however, that the president made the right choice in not assigning this role to the federal reserve. and that's a model that has been discussed, that perhaps the federal reserve should take on the responsibility of the systemic risk monitor. the chairman of the fed would be a member of the council that i have advocated, and of course the nation's top banker would play a critical role in how the council -- its responsibilities. but in my view -- how the council discharges its responsibilities.

in my view the council already has plenty on its plate including the conduct of monetary policy and should not be distracted from those primary responsibilities by being asked to lead the new council. there are certain other important provisions in the president's plan that i would like to comment on. first, with respect to the too-big-to-fail problem, my bill would give the council the authority to make sure that large financial institutions do not imperil the system by imposing higher capital requirements on them as they grow in size or raising their risk premiums or requiring them to hold a larger percentage of their debt as long-term debt. the president also proposes that the council play a role in

setting these requirements. madam president, we have to get away from the problem that we have now, where we create a moral hazard. a firm knows if it becomes big enough and engages in sufficiently risky processes or practices, that uncle sam is going to step in and bail that institution out. that is exactly the wrong message for us to be sending. it is astonishing to me that our regulatory system was so lax and had so many gaps in it that we can have this huge market and yesterday default swaps arise where they're regulated neither as a security or as insurance. we can have a situation where a large firm like bear stearns has a leverage ratio that exceeds

30-1 and no regulator is stepping in, that we can have all of those kinds of problems. and that's what we have to act to prevent. the approach to too-big-to-fail is one that we have to undertake carefully, however. i don't think that it makes sense to put some arbitrary limit on how big a firm can get, but i do think that with increased size should come increased scrutiny by the regulators and higher capital requirements. the tarp congressional oversight panel has adopted a similar position. as the panel has explained -- quote -- "we should not identify specific institutions in advance

as too big to fail, but rather have a regulatory framework in which institutions have higher capital requirements and pay more on insurance funds on a percentage basis than smaller institutions which are less likely to be rescued as being too systemic to fail." second, madam president, i support the idea of requiring the lenders keep some skin in the game when dealing with the securities. one of the big problems with the current system is risk has become divorced from responsibility. the mortgage broker gets paid for finding the client, placing the loan with a financial institution and then has no further obligation. the financial institution that's underwriting the loan and subselling it on the secondary

market so, again, has in further obligation. this system goes on and on and on. so i think the president is right about requiring everyone along the chain to have a financial interest in the ultimate health of the mortgage. since last spring the homeland security and governmental affairs committee which i'm the ranking member and senator lieberman is the chairman, has held a series of hearings on the roots of the present financial crisis. one problem consistently raised by the experts is the fact that acid-backed securities allowed listenedders to sell their loans to in-- allowed lenders to sell their loans to investors and avoid the risk that borrowers might default on these loans.

that encouraged looser lending standards and led to the boom and ultimately the bust in the housing market. now i understand that the ability to sell those loans gives more liquidity and allows for additional mortgages to be paid but i think if you require the lenders to retain an interest in the loan they're going to have more at stake when it comes to the financial security of the loan and, indeed, whether the loan should have been made in the first place. third, i'm intrigued by the president's proposal to reform the role played by credit rating agencies. i'm deeply concerned by the failure of these agencies to provide meaningful warning of the riskiness of investments backed by subprime loans even after the market's downturn and

i'm very troubled by the way the system works now where, essentially, there's an auction, there's rating shopping and there are conflicts of interest inherent in the system. fourth, madam president, i support the president's proposal to regulate and bring transparency to the derivatives market. including the over-the-counter market. this is a large, complex market, where some companies are trying to enter into legitimate hedging contracts but other financial institutions have been engaged in a tangled web of ente interlg contracts. the lack of transparency and regulation in this area led to the near-failure of a.i.g. which had engaged in hundreds of these contracts in the form of credit default swaps. as the financial crisis deepened

the american taxpayer was forced to bailout a.i.g. with at least $70 billion due to the uncertainty over the impact of these credit default swaps on the economy as a whole. but a.i.g.'s experience should not be used as an excuse to alter the traditional authority of states to regulate insurance. it was a noninsurance financial subsidiary of a.i.g. that led to the debacle. a.i.g.'s insurance business remained pretty healthy. the problems were in the financial services unit. and i don't think it's a coincidence that unit was regulated by the office of thrift supervision primarily which has been long recognized as the weak sister when it comes to bank regulators.

that's where both my bill and the effect of the president's proposal is to do away with that regulator and to have a consolidated regulator. fifth, i need to learn more about the president's proposal to consolidate consumer protection for financial products into one agency. the current financial regulatory agencies -- whether the bank regular livetheregulators or thd exchange commission -- all have an important role to play in consumer protection, a role that has not always been played adequately in the last few years. is the answer, however, to the problems that we've seen, simply to remove consumer protection from the bank regulators' responsibilities? i'm not sure that's the right response. i think we need to look very

closely at this. finally, madam president, i welcome the president's proposal to provide federal regulators with resolution authority over holding companies and other non-bank financial institutions similar to the kind that the fdic has over banks. this lack of authority presented federal regulators with a hobson's choice with respect to nonbank financial institutions like a.i.g., bailed them out; or allowed them to fail, notwithstanding the damage to the economy as a whole. madam president, let me conclude my comments, as a former maine financial regulator i am convinced financial regulatory reform is absolutely essential to restoring confidence in our financial markets and to prevent a recurrence of the crisis such

as the one we now face. i rock forward to working with the -- i look forward to working with the administration and i ask unanimous consent the reminder of my statement be included in the record. the presiding officer: without objection, so ordered. morning business is closed. under the previous order the senate will resume consideration of the motion to proceed to s. 1023, the clerk will report. the clerk: motion to proceed to consideration of s. 1023, a bill to establish a nonprofit corporation to comown indicate united states entry policies and otherwise promote leisure, business, and scholarly travel to the united states. the presiding officer: the senator from washington. mrs. murray: thank you, madam president. i ask unanimous consent to speak as if in morning business. the presiding officer: without objection, so ordered. mrs. murray: thank you, madam president. i rise today to draw attention to an event that is going on across the atlantic ocean and how it impacts thousands of

good-paying family-wage jobs right here in the united states. madam president, as some of my colleagues know, the paris air show kicked off this week. the air show showcases many impressive displays of aviation, technology, and innovation. but there's something else that's going to be on display at this year's air show: the fruits of some 30-plus years of direct cash advances and illegal subsidies to the european aerospace company airbecause. foairbus, the european government who created airbus to specifically compete with the united states have aggressively funded, protected, and promoted their venture. since 1969, the european governments of france, germany, spain, and u.k., have supported

airbus' commercial aircraft development with over $15 billion in launch aid. those are high-risk loans at no or low interest with repayment contingent on the commercial success of the aircraft. now, according to the ustr the amount of launch aid airbus has received during the lifetime of that company, if it was repaid on commercial terms is well over $100 billion. madam president, such massive market distorting subsidies are allowing airbus to offer incentives for articles to buy their planes. madam president, airbus is a mature company with more than half of the market for large commercial aircraft. but europe is still treating it as a company with kid gloves. in fact, just last week, bloomberg news reported that airbus is seeking approximately

$5 billion in launch aid from the governments of france, germany, spain, and the u.k., to now fund the develop must the airbus a-350 and the reports indicate that the deal could be completed within the month. well, madam president, if we want to keep a strong aerospace industry in america, we cannot let that happen. every time european governments underwrite airbus with subsidies, our american workers get pink slips. if we want to lead the world in commercial aerospace, our message to europe has to be strong and clear: no more illegal subsidies to prop up airbus and airbus has to compete in the market place just like everybody else. madam president, i am deemly troubled that airbus is considering pursuing, now, additional illegal trade-supporting subsidies that, in fact, have caused adverse effects on the american

aerospace industry at the same time the european union is being sued in the world trade organization for those such practices. madam president, that's why i am writing to ambassador john bruten urging the e.u. to show they are serious about ending any discussion or movement forward on the subsidies. the message sent by the u.s. government is very clear: on april 11 of 2005 this united states senate unanimously passed senate concurrent resolution 25 and that resolution called for european governments to reject launch aid for the a-350. launch aid for the a-350 or any other form of prefer usual financing for airbus is unacceptable. we will not tolerate another round of subsidies that kill our american jobs. map, in addition to the

trace-distorting subsidies now being talked about in paris, there are other disportions showing up in the news accounts, as well. several weeks ago, i had the opportunity here in the senate to question air force secretary at our defense appropriations subcommittee. i asked him and told him about my concerns for the future of our domestic industrial base. and how i believe that the future capabilities of both our domestic workforce and our military must be taken into account as we work to reform our procurement process. the secretary agreed the pentagon has an interest in ensuring our industrial-base issues are taken into account. well, madam president, that response now has some of airbus' top executives upset and, once again, distorting the facts. in newspaper reports over the weekend, the chief executive of eads, airbus' parent company

claims if airbus is collected to build the next generation of military refueling tankers they would create more jobs than competition for the u.s. aerospace industry. that is pretty hard to swallow. ing in, just a year ago, in june of 2008, an independent nonpartisan economic policy institute study concluded that the now overturned decision to award the tanker contract to airbus would actually have cost the unite united states 14,000 . so the truth is airbus doesn't even have a plant here in the united states. and their well-documented plan is to build their tanker airplane in europe and then ship sections over here to the united states to be asex peopled. the boeing tanker, however, would be dealt in washington state, and military capabilities would be added at the company's defense plant in wichita, kansas. suppliers in stats across

america would be supported -- in states across that america would be supported by that. a boeing tanker creates twice as many american jobs as an airbus plane. but, madam president, it is not just about jobs, it is about the future of america's domestic still strength. our government depends on our highly-skilled industries, our manufacturers, our engineers, our researchers, our development and science base to keep the u.s. military stocked with the best and most advanced tools and equipment available. so whether it's scientists who are designing the next generation of military satellites or whether it is our engineers who are improving our radar systems, or our machinists who are assembling our planes, these industries, these industries and their workers are one of america's greatest strategic assets. so we ought to ask the