have a big tax on financial engineer so they cannot make up all these new things got so rapidly. it is this highly complex, opaque financial engineering which gave a false sense of confidence, which broke down. you have outlined the challenge , and the treasury and the administration tried to address it. i am making a few suggestions this morning. you cannot let it go without some important action. . .

we have to start taking care of the consumers this time around. thank you. >> the gentlewoman from kansas. >> thank you. the administration has said the one of the goals of the resolution authority is to inflate the cost of than the year upon shareholders and bondholders. mr. timothy geithner has been unable to say that further bailout of creditors will be off the table. in a world where the mantra has become no more laymen is the promise that hair cuts will be

inflicted upon creditors. it is not credible, doesn't it mean that the next crisis will be bigger? >> the danger is that the spread of it could make the next crisis bigger. it will not the next year or four or five years. we want to make a system so we did not have a bigger crisis 10 years and now. if we do nothing, i am afraid there is a real danger. you want this resolution as creditors are taking a hair cut if they have to. the stockholder will probably lose completely. in many cases, there will be a forced merger or other actions that will not require the

injection of government money. that is more forceful than what happened in the middle of the great crisis a year ago when the bond holders were pretty much protected. they were protected in the financials. even some stockholders were protected. they did not lose as much as you might have thought they should have lost. we want to minimize that kind of results so that the lesson get through. you creditors are taking a risk. you ought to understand that. the government is not going to come to your aid if this institution fails. this is a game -- i hate to call it a game -- this is the

approach we are telling -- are trying to instill. we do the best to ken without destroying the system. >> can i yield back the balance of my time? >> the gentleman from massachusetts. this time i saw you. >> thank you. i am ready. thank you. thank you for your attendance and help in the committee with its work. i was listening to your testimony. this whole framework that we are considering, given the complexity of some of the instruments that serving traded now, the derivatives that we are not going to put on exchanges

and some that are not a do not require oversight, we are entering new territory here, which we hope will bring more effective regulation to the entire for initial services industry. the question for us in part will be how to pay for that. how to pay for that structure. i know of the last time we pay today we have a great -- they said down and they direct a system -- they sat down and they derive a system where it would go in to pay for the sec. that number has been reduced over time, because of the volume of trades. would you favor some type of -- when we have to grapple with how to pay for this -- would you

favor some type of system, some track -- some transaction fee for example, that would help fund all of this? we have many of our constituents that do not tell an ira or money in the stock market yet. they will be paying for this system that they do not necessarily benefit directly from. i was wondering if you leave -- if we could have your thoughts of how congress pays for some of the regulations the we are about to implement. >> this question has arisen from time to time in the past but of is rose poignantly 20 or 30 years ago. as to whether a little tax would not do some good for raising revenues and discouraging suppletive activity. i think the conclusion of fuel

the looked into it was too full. it is very hard to do it for one country in any significant amount. you forced the market to another country that does not charge. yet to get some consistency internationally. the more general problem if the fee is low enough not to be distracted, it is not one to raise much revenue. it was china to raise revenue. -- it was high enough to raise some revenue. it might be interesting if congress suggested somebody but that this and see whether there is anything to the idea at all. you are probably aware that the head of the british supervisory has proposed may be a little tax

on financial transactions will be a bit thin. today may be a good thing. maybe the financial world got too big in the uk. it cut too dominant. in made a lot of money but it did not contribute to the national wealth of the united kingdom. he has raised some very interesting questions, including the question of this tax. he has a point. you are probably familiar the fact that the world of finance at one time in terms of its total profits seem to almost 40% of all the profits in the night states. that is not even count of the bonuses. that is after the bonuses. some people raised the question. i raise the question of whether the value of the world of

finance is 40% of the united states. things have gotten a little about -- a little out of bounds here. it is harnessed to the job it is going to do. it is absolutely indispensable. for a while we are heavily profitable. then it turned very sour. how you get the job done in a way -- a smart man can make reasonable return to the place in the whole economy at risk. >> your time has expired. there are 10 members present that have not ask questions. i'll give priority to the people who are here. everybody said there it can do

it. that would give us some people, an hour, we little people for five minutes. it is now up to you. >> we put together a republican plan to deal with reregulation and a new regulation to one of the head is the we put forward with an enhanced a bankruptcy rather a resolution 030 by the reserve. in doing that, i think we feel it create more transparency, accountability. aching go into the bankruptcy court -- it can go into the bankruptcy court with the experts that would understand the complexity. it would remove any appearance of a bailout or another implicit

or implied governments back stock. do you have an opinion on an enhanced bankruptcy as opposed the regulation of 30? >> i've not seen in your proposal. when the emergency comes, you do not have much time. it looks sufficient. the government had to take action immediately. we are going to put someone in it to run this organization. it can do what it can do in terms of doing the kind of thing with the creditors that a bankruptcy courts might do. he does have days or weeks or months to work it out. -- you do not have days or weeks or months to work it out. that is the problem we are dealing with. the ordinary bankruptcy type works ok one need not have a

systemic risk that is a day-by- day affair. you have to deal with it immediately. that is the problem we ran into a year ago. it give a better way of doing it, good. i think you have to recognize that constraint. but my last question is that so many of these matters are so darn complicated. for the man on the street who's listening to this hearing or any time ago to my district and tried to talk about the need for new regulation in the financial markets, people's eyes start to glass over. i know you have made many speeches. is there any way in a concise way the sites this is going to protect you from losing your retirement in the future, is there any way you find it most effective to convey the message to the man on the street that

this is an issue that really does impact them every day? >> it will be no comfort to you that i find it too damn complicated myself. is there complicated. i think the message that you have to give them is the whole object of this exercise is to prevent a repeat of what has happened. it is not just a loss of finance. that is obviously important. that is serious enough. it also affected the operation of the economy. people lost jobs and your left with a big recession. we are dealing with a big problem. you are dealing with it. i wish it was simple. it is not very simple, because the finance system itself has gotten so complicated.

i think that this part of the problem. it has gotten so complicated i'm sure that management of financial institutions and not understand what people are doing in the bows of the institution in some very fancy engineering. they told that they have a dock figured out. you can buy them or you can treat them. at the most management was able to see that. it is very complicated. i think the cloud before the eyes has been removed. we ought to take advantage of that nature does not return. >> thank you. >> mr. miller?

>> thank you. last fall when lehman collapsed and aig was rescued, i felt like i was not a conscious member of this committee. i had very little understanding of credit default slots. then i came to realize and no one understood them. that made me feel a little bit better about my own level of consciousness but made me feel worse for the economy and the world. in your testimony, you a did by credit default swaps as something that had exasperated the risk that our economy base. the great bulk of credit default swaps are between parties, none of whom have any risk to manage. they have no interest in the underlying whatever it is. in your testimony, he said some

kind of risky behavior should not be allowed of institutions that are systemically important. do you believe credit defaults swaps, where nobody has any interest in the underlying security, should be allowed of systemically important institutions? but let me make a general position. my general position is they make a distinction between banks and others. bank of be protected. they are protected in other countries. they have been protected here for centuries. that is not want to change. it should not extend. -- that should not change. thus the extend that to the whole world. -- let us not extend that to the whole world. it became a big perspective in

the trading market. yet many more credit default swaps. it raises some questions about the function in the market and the basic purpose that it is serving. the market was developed in a rain that it was vulnerable to collapse. it came under great strain because aig was so central to the market but th. it was of concern before the crisis bur. >> the need to move your microphone. i'm having a hard time hearing you. but people have been working on the credit default swap problem in terms of the crisis.

there was some success and some great effort began of the crisis is exposed for the government stepped in. i do not know how many require legislation. now there is a lot of progress in forcing this trading into clearing houses were organized exchanges with the whole counter plea of rules that it implies. cluster zero requirements, protection against equality. that is a big step forward. the-of had the aig problem -- you might not have had the aig problem if the regulations were in place before. aig was not sufficiently

collateralized and protect against risky given what happened. they thought they had no risk because they were so big and strong. they were not so big and strong. you had a problem. it is one of the areas i am sure that the progress is going to be made. but do you think the margin requirement to the collateral is sufficient or do you think -- >> somebody ought to be in a position to make sure it is sufficient. i'm not an expert. somebody ought to be deciding that. >> are there any collateral default swaps -- credit default swaps or other derivatives that should require interest by somebody in the transaction? >> i think this whole market need to be brought under surveillance.

you ought to provide the authority to satisfy themselves so the market is sanitized. >> thank you. >> the gentleman from texas but the >> thank you. -- texas. >> thank you. looking back to your experience at the federal reserve, one of the things that is out there today is that the federal reserve would designated these tier one companies. a lot of people believed that when you say that a company is a tear one that they are too big to fail. there is an implicit guarantee theis that they are too big to .

is that good for the marketplace? is that the policy? >> i do not like that idea. that is part of what i'm saying here. [inaudible] i think that adds to the moral hazard problem. most of what we've been discussing is how to corral moral hazards. i do not think that is the way to do it. >> i have heard you say, and i think this is something you and i agree on, that capital could have procured a lot in the bills but we faced in the country over the last year it these come as having capital is still a level sufficient of interest with risks and exposure that they were taking.

is it a better strategy in your opinion for the regulatory agencies that these entities are very diverse and actually do a better job of breaking down the businesses that each one of these entities is in and assigning capital acquirements for those activities? if the entity wants to continue that activity they will have to have a certain amount of capital to do that. then the market place begins to analyze those businesses and ascertains with want to furnish the capital to those institutions. then to have a check and balance on the market place as well as the regulatory structure? bu>> i think it is important. if you try to fine-tune it too far, the banking regulators the

struggled with this. how much capital in each particular kind of risk of baskets -- it is very hard to define. and we are going from a system that was very crude when i was chairman. it did not have all those of us is that you are talking about they have run into more difficulties. they spent 10 years trying to define this. they put a lot of weight on credit rating agencies. that no longer looks so great. that is illustrated of the problem you run into. do not try to be too sophisticated about it. i do think when you get into

nonbanks, bank capitals -- they got so big they really live dangers from the standpoint of financial stability. somebody has the authority to say your to leverage. you got to provide small capital. i do believe in registration of hedgefunds. i do believe there ought to be reporting in hedgefunds. i think there are very few hedge funds the present a systemic risk. it is a different kind of operation and financing. some more successfully absorbed without much difficulty.

where that was not true or the hedge funds owned by bear stearns. it was slide with a year or losses in its own head and did hedge funds. that is why the number of commercial banks to be holding hedgefunds. that would be a point of vulnerability. >> we have to vote, unfortunately. we will have time for two more questions for people who are here. then we will break. we will resume and we will start with those who work here and did not get it out. the gentleman from georgia. >> and esp to comment on the whole issue of two -- let me ask you to comment on the whole issue of too big to fail. we have not paid attention to what happened as a result of that. the consequence becomes what do we do? do have a strategy?

this the strategy lead to another shredded cheese called too small to make -- to another strategy called to small to make? banks went under. they never came back. the smaller banks essentially began to serve a niche. i am very concerned about what the future of our smaller banks are doing. are we at the point -- there is not that much attention that we are faced with in terms of the smaller banks. bank after bank after bank has gone under across this country. they have not been the bank of america is for the suntrust for the national banks. they have in these community banks that actually provided the

money for these communities. one of the big problems we had with the automobile dealers was the fact that was the automobile manufacturers have a problem, the dealers had the problem but was not their problem. their problem with the inability to get money. i think we are glossing over a deeper problem here -- of getting down to the grass-roots industry community. unemployment is not one to bounce back until we get the small businesses running. the small businesses are getting their money from the smaller community regional banks. because of this over emphasis on this to be to still -- on this too big to fail strategy, we are losing the big picture. we are been live -- we are then left with too little to fade but i'm not sure how helpful i can be -- fade.

>> i'm not sure how helpful i can be. the banks are kind of easy to take care of. i do think it takes judgment. in the case of the small banks, to what extent is the problem one of accounting practice. i think bank accounting needs review. i am not sure how important that is to the small banks. are there cases where forbearance would have been justified?

that takes a very sophisticated and understanding regulatory regime which may be on this. >> d.c. feature for this small community regional banks? -- do you see a future for the small command to regional basis? >> i see a picture, because they have some inherent advantages in dealing with local communities. i think they ought to be conscious that we are not unconsciously undercutting them. i'm not that any magic answers to that. >> thank you very much. over the past six months, loans and leases have declined at a record annual rate of 8% with no

hint of an upturn despite the fed post a massive effort to get credit flowing. credit is still not learned sufficiently to ensure a strong and sustainable economy. do you believe this to be a two sided problem -- one, a reduced willingness of banks to lend and two, the subdued a desire to borrow? >> bank lending is declining i guess. this is an area of the market bet [inaudible] it is a matter of confidence. i think it is going to take time for that to a lot. the big market has opened up considerably. the small bank market has not. there are some signs that are beginning to change. i hope we can see evidence of that before too long. >> thank you.

>> thank you. the good news is i appeared to be your last question of the morning. thank you for your time. and what to follow up on a line of questioning from my colleague from texas. perhaps it is theoretical. he was inquiring about in retrospect could the regulators, had they had i suppose more perfect knowledge in being able to assess risk, could they not have applied the proper capital and liquidity standards, be it to our insurance institutions or our investment bank's index the radically had they known, could you have -- banks. theoretically, could they have known the turmoil? >> i think the answer is through

-- is theoretically, yes. my other answer may be practically, no. the problem of banking supervision is when things are going well, nobody wants to hear it from the supervisor. that includes congress. you will hear complaints from their constituents of what are those big bad rate jitters doing requiring more requirements. i am doing fine. leave me alone. then when things happen, where were they? where were they? >> i guess from a historical perspective, and i would ask if you agree or not, the provincial regulators have the ability to take prompt incorrect action. >> there wasn't the year in the

banking regulation. >> perhaps a lot the courage, but they did not like the regulatory authority to have imposed a capital liquidity standard that would have been -- >> there are two things in particular that i would say directly to that. i do think the idea of having an overall overseer to look at things -- whether some trading operations are developing. we have not had anybody overtly and specifically charged with that kind of responsibility. we have individual agencies looking at individual banks. they do not take a police estimate the view by nature of their responsibilities. as far as the fed is concerned, if they are going to carry responsibility, there does need some reorganization.

i have suggested the we created a position for a few in the federal reserve is supposed to be on top of that? >> let me turn to the question of resolution authority. there are differences on how best to do that. perhaps the federal reserve undertaking this duty -- i believe i heard chairman frank say that whatever the resolution o40 authority ought to be a deah

sentence. we presently have fannie mae and freddie mac and aig and forms a conservatorship with massive transfusions of taxpayer money with no exit strategy and no end in sight for the taxpayer. whatever resolution authority may come out of the united states congress, could you speak to us about your opinion on whether or not it should have the ability to place these into conservatorship verses receivership? >> i think there ought to be authority for both.

>> would you put aig in the category of a firm? cut i'm not sure how to interpret your laughter. >> i know it is very complicated. complicated enough so i wanted to get involved. >> we are out of time. >> thank you. >> the first question has to do with the notion that metaphorically speaking this economy had a toothache. many times when you have a toothache, he will do anything to get rid of it, one to rid of it, you do not have the same memory of the pain at the time you had it. i want you to tell me just how bad it was. you spoke in terms of the economy going off a cliff. how bad was it when we interceded? how bad was it? what's a very bad. >> compared to the great depression?

it this was 8 -- that was a tank, how bad was this? >> extremely forceful action was taken to curb the deterioration. for a couple of quarters, the economy went down rapidly. it became a worldwide phenomenon. it became a phenomenon almost all -- in almost all will developed countries. you have a situation that could feed upon itself. there is no strong point of growth in the world economy. it was bad. it is impossible to tell what would that happened without the massive government support. at that time, and the financial system was based upon government support. that is not the kind of financial system we want to have.

>> when used the term going off a cliff, give me does a little bit more of what that means? >> falling off the cliff analogy applies to the liquidity of decline and economic activity for six months or so. it found its expression because -- the supply of credit dried up. banks were not lending. the open market was constipated. there was no availability of credit. that led to difficulties in carrying on economic activity. >> now i want to add one final question. we have different views on this. i'll give him an opportunity.

he may one day follow-up. was the cra because of this crisis that you and i just talked about? >was the community reinvestment act because and that's what's -- was the cause. >> was is because it? >> i do not mean to insult your intelligence, but i want is on the record. >> i do not believe it was a significant factor in the situation. >> because they are short on time, could you use -- >> we go through every team were we ask the government sponsored enterprise is fannie mae and freddie mac'. that is not as i'm interested in.

>> please come and do not recreate fannie mae and freddie mac. -- in the form of these hybrid institutions, have private, how public. >> you think it was one of the causes? >> i think they were a factor, yes. >> back in 999, and they said 27% of all the liabilities of firms in the u.s. were guaranteed by the government. another 18% enjoyed some support. that is by 10 years ago. then we look at march 2008 when the fed stepped in and assumed the risk of the loss of about $30 billion. we have seen this rapid expansion of both the perceived and the actual financial safety net, and the safety net.

to you think the expansion of this that has exacerbated the too big to fail problem? >> yes, i think the whole discussion we have been having here is trying to figure out some way of pulling this out. >> i'll have to ask him to get the rest of his responses in writing. >> thank you very much. >> thank you. >> we thank you for being here. i do this on behalf of our share. we will be coming back after this vote. it is a great pleasure that we of have you here today. thank you. >> thank you for having me.

we are going to get started. chairman frank asked me to give the committee started. we will try to follow the instructions given to me by chairman frank in terms of who will ask questions and in what order. i think we will go ahead and begin with the testimony. we appreciate you donating your valuable time. we are going to begin with the former chairman of the sec and senior advisor to the carlyle group. >> thank you for the opportunity of appearing before the committee to discuss the critical issues and assessing a systemic risk regulator and

resolution authority. i will summarize my prepared statement which i have submitted for the record. as a former chair of the secm and currently as an adviser to the carlyle group and goldman sachs, i hope i can share with you important considerations to inform your efforts. though the appetite for regulatory reform appears to move in an inverse relationship to market performance, financial markets are no less risky and regulatory gaps remain. i am concerned that public investors may well be convinced because of a relative market calm over the last few months that all is well in our regulatory system. all is not well. i am glad you are showing leadership in addressing these issues.

your success will be determined by how well you from the principles with effective regulation. these are principles relating to transparency and regulatory independence, proper oversight of leverage, and risk-taking, to the nurturing of strong enforcement, early intervention, and imposition of market discipline. when it weekly questions before this committee is how to authorize and held accountable a systemic risk regulator and to should provide this function. i would like to suggest a more critical question -- whether in a regulator or groups of regulators can have the same impact as well as a resolution authority. such an authority would be created explicitly to impose discipline on those with the most power to influence the

level of risk changing. the holders of both equity and debt in the institutions which may be too big to fail. a systemic risk regulator will not be effective unless you also create a resolution of 40 with the power to send these failing institutions to their demise. that impact the holders of both their debt and equities. to give a simple analogy, but it does not matter who serves as the call on the beat if there are no courts of law to send lawbreakers to jail. i strongly believe that a systemic risk regulator might serve as an early warning system with the power to direct appropriate regulatory agencies to implement actions. i am agnostic about who should lead such an agency and perform this function. i would caution against making the federal reserve the systemic

risk regulator in its present stretcher. the fed post a responsibility defends the safety and soundness of financial institutions and manages monetary policies and creates an inevitable and compromising conflict with the kind of vigilance and independent oversight a systemic risk regulator requires. if, however, the fed is deemed to be the best available place for this role, i would urge congress to remove from the fed some of the responsibilities conflicting responsibilities, especially those of a bank oversight. and many respects, the surest way to cause investors, lenders, and management to focus on risk is not to warn them about risk.

it is to give them every conceivable way to discover risk and tell them what will happen to them if they do not pay attention. we can deal with this by establishing a resolution authority charged with closing out of failed institutions which pose systemwide risk. such an authority would have the power to do just about anything. it determine night -- it could terminate contracts, it canceled debt coming cancel equity, and refer management and taking excessive risk even after multiple warnings. i would expect a managers and creditors and investors would become a good deal more careful having foreknowledge of their

potential rights and responsibilities should such a resolution authority be activated. they would see the advantage of greater transparency in developing more knowledge of the individual institutions. this market the discovery may well do the work of many outside systemic risk regulators. your goal is to intensify as market discovery. you will also want to establish the value of transparency with respect to market information. i want to emphasize in particular the importance of fair body accounting for major financial institutions in gauging the insignificant amount of risk-taking and leverage. such accounting gives them a true sense of the value of an asset in all market conditions. not just those conditions favored by asset holders.

greater transparency would make it possible for market participants to price risk appropriately for a systemic risk regulators to demand fresh infusions of liquidity or higher margin requirements if needed. i would much prefer that a systemic risk regulator be so affected that a resolution authority would be unnecessary. sadly, we know that all is preventing failure is absolutely in possible. today absolutely impossible. it is my opinion that it is your job to make their possible. thank you for your attention to these issues. i urge you to continue to decelerate your efforts. >> -- to accelerate your efforts. >> the next witness is the

senior director of undergraduate studies at harvard university. let me as the three remaining witnesses, because of the possibility of another bovote in it would divert 30 minutes, i'm going to ask if you can push of a the most vivid and parts of your testimony. so we can make sure they you able to complete your testimony before any roll call. >> thank you. let me begin by expressing my thanks for the opportunity to express my views. the question i would address is whether congress should adopt title 12. this act would grant the fdic power to resolve insolvent financial institutions similar to those for banks.

this is an unequivocal no. they tend to adjust the when a financial institution fails, the value of the claims exceed the guise of the assets themselves. it is impossible to make everyone whole. it has shrunk. those who were expecting a slice of the pie face a necessity of going hungry. the resolution authority decides who gets what. someone has to go wanting. it is the society's broad interest to have clear strategies to do this. if the roles were are cherry or ever-changing, investors would invest [inaudible] a well functioning resolution

process is a well-run system. it is essential to a smooth capital system. someone has to lose. it is bible to society as a whole -- is by able to society as a whole but those in the failed institutions suffer economic loss. the flip side is that they impose losses on the stakeholders. it puts none of the own resources into that institution. the resolution of 30 is resolving claims. -- authority is resolving claims. the fdic would have power to make loans the financial institutions and to guarantee obligations and so on. the fdic would you putting its own taxpayers in a radical

departure from standard of bankruptcy. this bill institutionalizes tarp. taxpayer funds a foot the bill of loans and guarantees the fdic would provide. these infusions of funds, a little meaningful accountability. it'll be hard to know when they will be paid back. it generates the impression that society can avoid the losses. that is false. it would merely shift those losses to the new approach. under the expansion of authority, bank holding companies will regard themselves as explicitly backstop but the full faith and credit of the

u.s. treasury. that is a moral hazard. it to be disaster -- it'll be a disaster for keeping the lid on this. bankruptcies by financial institutions cause great harm. nothing could be further from the truth. the ultimate cause of the financial crisis were to misguided federal policies, mainly the enormous subsidies for mortgage lending and the implicit guarantees provided by the fed actions and u.s. history of protecting financial institution creditors. this generated an enormous misallocation a capital. it traded a bubble. they had to fail because their assets were grossly overvalued and no leman's billion was a

necessary part. -- overvalued. lehman's failure was a necessary part. the better way to resolve non- bank financial institutions is bankruptcy, not bailout. one can imagine ways it might be faster to be more transparent and beneficial. the bigger seized been allowed to operate fully, the economy would have escaped without any pain. nothing in the data suggest these bankruptcies with a cause anything worse than what we experience. i urge the members of this committee to vote against this bill, since it codifies a result that is misguided.

we need to learn from our mistakes going forward as they should have done in the recent past. >> thank you. >> thank you. thank you for the of urgency to testify. my remarks are my personal views and not that of the corporation. the obama administration proposed regulatory reforms will result in a more stable and will functioning and they -- functioning financial system. reform must establish a more orderly resolution process for large financial firms. they contributed to the kelly to the panic that hit the financial system must of timber -- to the financial panic that hit the system last september.

it should preserve the stability while encouraging market discipline by imposing losses on shareholders and other creditors and replacing senior management. charging them with this responsibility is appropriate given the efficient job it has done. it to be important to require the firms maintain an acceptable resolution plan to guide regulators in the event of their failure. institution should be required to conduct annual stress tests. such an exercise would be very therapeutic and would reveal how well institutions have prepared themselves for a better performing economy. it must address the too big to fail problem which has become even bigger. desire to break of large institutions is understandable, but nothing there is any going back.

taxpayers are providing a substantial benefit. institution should meet higher standards. s. firms grow larger, they sit be exposed to greater disclosure requirements. reforms to make markets more transparent to thet. the key to better functioning financial markets is increased transparency, requiring over- the-counter registration. it provides markets with the information necessary to evaluate this.

issuers of corporate equity debt must provide extended a information to investors, but this is not the case for mortgage and other asset backed securities. having an independent party but the data we didvet the da -- independent party vet the data would go a long way. the fed is uniquely suited for this task. the principal worry is that its conduct a policy may come under unduly -- under oversight. [unintelligible] it to be very counterproductive if regulatory reform or to