WASHINGTON, D.C. – Oregon’s Senator Jeff Merkley made the following
statement today regarding the Obama Administration’s efforts at this week’s
G-20 summit to promote an international agreement that addresses continuing
risks to the international financial system:
“At the current G-20 summit in Pittsburgh, President Obama
is calling for an agreement to strengthen international capital standards for
banks. Such an agreement is critical to preventing another global
economic disaster.
“Our financial system is more global than ever before, with
billions of dollars exchanging hands every day. The current international
regime regarding bank capital is far too weak and firms operating under it
continue to present a major risk to the stability of the international banking
system. The Administration is right to push the members of the G-20 to
agree to raise capital and liquidity requirements across the board and require
firms to be accountable for the costs of risky activities and out-sized
growth.
“We need to establish fair rules of the road for financial
firms around the world. Otherwise, firms will migrate to the area with
the weakest regulation, where gambling with excessive leverage can continue to
threaten the stability of the U.S financial system. The same ‘heads we
win, tails the taxpayers lose’ game that almost brought down the global
financial system just one year ago cannot be allowed to return, only this time
in London or Luxemburg. The American people were outraged to see
$50 billion of the U.S. bailout of AIG flowing to foreign financial institutions.
It is time that our allies and partners come together to set our financial
system right.
“As President Obama mentioned earlier this week at the
United Nations, the closer we look at the global economic and security
landscape, the clearer it becomes that the United States cannot take on these
challenges alone. Whether we’re talking about labor and environmental
standards or the solvency of international banks, the only way to protect
ourselves from another financial collapse and ensure the success of American
financial firms is to work towards a level playing field around the world.”
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