Richard H. Neiman, Congressional Oversight Panel Member Issues Statement of Additional Views on Panel's Report, "Assessing TARP Strategy"
Neiman Believes Treasury Plans are Viable and Can Restore the Financial Stability Needed to Emerge from the Economic Downturn
April 7, 2009
New York, NY: Richard H. Neiman, Superintendent of Banks for the State of New York and Congressional Oversight Panel Member, today issued a Statement of Additional Views to the Panel’s report, “Assessing TARP Strategy.” John E. Sununu, former U.S. Senator and also a Panel member, joined the Superintendent in issuing the Statement of Additional Views.
“The report issued today by the Congressional Oversight Panel identifies central issues that should frame the public policy debate on financial stability, including the importance of asset valuation, the extent to which the current crisis is being driven by liquidity as well as credit factors, and the proper relationship between the public and private sectors,” said Neiman.
These issues are complex and the Panel did not reach an agreement on either the economic assumptions underlying strategic choices or whether the Administration should be pursuing alternative strategies. The debate focuses on whether current prices, particularly for mortgage-related assets, reflect fundamental values or whether prices are being artificially depressed by a liquidity discount due to market uncertainties.
Neiman states that it is reasonable to assume that a liquidity discount is impairing these assets, and thus the Treasury’s plan, based on this assumption, is viable. He believes that the Treasury’s plan should be given the opportunity to work. “Speculation on alternatives runs the risk of distracting our energy from implementing a viable plan and needlessly eroding market confidence,” according to Neiman.
Neiman believes that success is achievable. “We have the wherewithal not only to restore financial stability, but to emerge from this crisis in an even stronger position. Prosperity is not a zero-sum game. It is not the case that one person or group necessarily prospers at another’s expense. If we stand together in investing in our common future, as individuals and as corporate citizens, we continue in our country’s tradition of pragmatic optimism and lay the most enduring foundation of all for our lasting economic stability.”
The Panel’s full report as well as the Statement of Additional Views is available on the Panel’s website at www.cop.senate.gov as well as on the Banking Department website at www.banking.state.ny.us/copr.htm.
About the Congressional Oversight Panel
The Congressional Oversight Panel was created to oversee the expenditure of the Troubled Asset Relief Program (TARP) funds authorized by Congress in the Emergency Economic Stabilization Act of 2008 (EESA) and to provide recommendations on regulatory reform. The Panel members are: Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO, former U.S. Senator John E. Sununu (R-NH) and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.
About the New York State Banking Department
TheNew York State Banking Department is the regulator for all state-chartered banking institutions, virtually all of the United States offices of international banking institutions, all of the State’s mortgage brokers, mortgage bankers, check cashers, money transmitters and budget planners. The aggregate assets of the depository institutions supervised by the Banking Department are more than $2.2 trillion.