mr. pickel, please. >> members of the subcommittee, thank you for inviting to us testify today. we're grateful for the opportunity to discuss public policy issues regarding the private and negotiated or otc derivatives business. our business provides essential risk management and cost reduction tools for many years. it is an important source of employment value creation and innovation for the financial system. i would like to underscore the industries strong commitment identifying the risks in the business. we believe that otc derivatives off significant value to the customers who use them, the dealers who provide them and the financial system? general by enabling the transfer of risk between counterparties, derivatives exist to serve the risk management and investment needs of end uses and include over 90% of the fortune 500. the vast majority of these transactions are interest rate and current si swaps and equity and commodity derivatives and privately negotiated contracts. we recognize that the industries today faces significant challenges and we are urgently moving forward w

mr. pickel, i think for buddy -- >> he deserves a good answer. as briefly as possible. >> i would say in the derivative space for 25 years the developments were on market risks, interest rates, currency, equity, commodities where you are managing risk. credit risk is a relatively new derivative and i would say we are still understanding some implications of that and i think that professor hu's work has been interesting in that regard. i would say regarding that empty creditor issue, the fact is every time somebody is going into the market and buying protection which is what he's suggesting someone is doing he's sending signals your business plan isn't working, the yellow light is getting brighter and brighter and so when it comes to the end and somebody says time is up, i am not going to continue to lend to you i think that's a natural evolution but it's certainly understand that. i would also mention the credit stifel swaps are becoming embedded in various ways. if they are being used for pricing loans. it was done with the rollback of scotland