Mark Warner

Mr. WARNER

Mr. WARNER. Madam President, I rise to speak very briefly, following the comments of my colleague from South Carolina on the pending amendment that I know has received broad bipartisan support. I also wish to comment on what happened in the market today. The stock market was down about 347 points. But what was more telling was the stock market, at one point today, approached a loss of 1,000 points which, if it had held, would have been the largest single-day loss in modern history. There were a number of causes. My colleague mentioned some clear concerns about the crisis in Greece. What it appears to be in terms of real-time reporting going on right now is that part of this precipitous drop took place because it appears there was a technology glitch on an order put in that had no backguard or safeguards to stop it. I am going to quickly go into an area that is actually the expertise of Senator Kaufman. I know Senator McCain's amendment will be up in a moment. I have heard, while sitting in that chair, my friend, the Senator from Delaware, come to this floor time and again to talk about the challenges that have been created in the marketplace with the increased use of high-speed trading, flash trading, colocation, sponsored access--a whole series of technical terms but terms that we may have seen the first inkling today with what happens when these tools of technology do not work the way they are supposed to. I ask my friend, the Senator from Delaware, who has spent time on this issue much more than I, today we saw--and I have become a believer and I know the SEC has started moving forward on the flash trading issue, but there is a series of other activities that as we go through this financial reform bill, we at least need to have more facts. I believe the SEC needs to have the resources to keep up with the marketplace. We saw a living, breathing real-time example of the potential catastrophe that could take place if we do not have the ability to adequately use the technology and have safeguards and realize how some of these firms are using this technology to get an advantage over the everyday Main Street investor.

Mr. WARNER

Mr. WARNER. Mr. President, let me follow on my colleague's comments. He is my colleague and my friend and my partner for the last year. I think we've both, as former business guys, said this is not an issue that should be partisan. We need to check our ``D'' and ``R'' hats at the door and find a way to sort through a new set of financial rules so we never have to face what we faced in 2008. I think some of the original approaches that we had might have been tighter. I know we talked a little bit off the floor about the notion that actually some of the borrowing authority that now exists might be larger than what we had initially proposed. But at the end of the day, what is important is that, one, the taxpayers are protected--and that is what the Shelby-Dodd approach has; it has no recoupment from the financial industry--and two, to make sure there is money to wind these firms down in an orderly fashion. We have seen with Lehman, a year and a half after the fact, literally hundreds of millions, close to billions of dollars, that are being used to unwind. That process takes time and money. I again share the concern of the Senator from Tennessee that we ought to do this in as limited time as possible. Let me take 2 more quick minutes and say that, if we have done our job right, we are never going to have to get to resolution because bankruptcy should always be the preferred process. We have put the appropriate speed bumps on these firms that become large and systemically important: higher capital requirements, better review of their leverage, making sure they have good risk management plans. And we have created two new tools that have not gotten any discussion but I know, in our hundreds of meetings we had, kept coming back time and again. One was the creation of a whole new set of capital that would convert from debt into equity if a firm ever gets into a problem. And second, a funeral plan that has to be blessed by the regulator that would show how these large firms, particularly firms with international operations all around the world, can wind themselves down through bankruptcy. If the plan is not approved, the regulators can take more dramatic action. I think the heart and soul of our challenge, which has been to end too big to fail and make sure taxpayers were not exposed, has been accomplished. I thank the chairman and Ranking Member Shelby for their work on this. I look forward to support this--and I look forward to support this amendment as well. I want to conclude with my thanks to my colleague and friend from Tennessee. I think we did check our hats and put a business approach on trying to get these titles right, and I agree with his comments that we appreciate any improvements made by both the chairman and the ranking member. I look forward to supporting this part of the legislation and I hope we can continue to work through on the balance of the titles in this same way. I thank the Chair.

Mr. WARNER

Mr. WARNER. Mr. President, I commend the Senator from California for her amendment. As one of the people who was charged by the chairman to work on this section of how we make sure we put appropriate barriers to firms getting too large and barriers to firms being too big to fail, and should they fail, making sure taxpayers are never on the hook again, I think the amendment of the Senator from California adds that emphasis. We took the chairman's charge at his word. This is an area where there was complete bipartisan agreement. I had the good fortune of working with my friend and colleague, the Senator from Tennessee, on this issue. We put a strong preference in the bill toward bankruptcy as the normal process, and even put into place a new series of requirements for large firms--particularly internationally significant firms--to come forward to the regulators and describe how they can unwind themselves through an orderly bankruptcy process, that being the normal process. But in the event, as we saw in 2008, there may be times, even with the best laid plans, when you may reach a level of crisis that would require resolution, if there is resolution, it should not be propping up firms the way we did it in the fall of 2008. The resolution should be a death knell for any firm that is put into that process. It should be something any logical management team or series of shareholders would want to avoid at all costs. We put forward a process where it is postfunded. I think reasonable folks can agree on which is the best option. At the end of the day, if there are any funds used to make sure we can unwind this firm in an orderly process so that it doesn't cause any further systemic damage to the overall financial system, and indirectly to the American taxpayer, and if the financial system is shored up by that action, that any costs not recouped--if this firm goes out of business and it is being put out of business, if there are funds expended and they have to be recouped from some source, that source should not be the American taxpayer. Again, I commend the Senator from California for her efforts with this amendment. It adds that exclamation point. Again, I cannot imagine that my colleagues on the other side, who I know share the same view, do not want to make sure taxpayers will never be exposed again by the mistakes made by Wall Street. I think this amendment is a good place to start this debate, where we have that common cause. I yield the floor and suggest the absence of a quorum.

Mr. WARNER

Mr. WARNER. Mr. President, I wasn't planning on speaking today, but I have had the opportunity to preside for the last couple of hours. I heard my friend from Arizona earlier today make some comments about the financial reform bill. I rise to address them. Before doing so, I commend the Presiding Officer for his comments this afternoon, comments with which I may not fully agree, but he makes a very persuasive and interesting case about how we get this right. Clearly, we have to make sure our goal is setting rules and regulations that will stand the test of time. We have to make sure we end the notion of too big to fail. I know the approach of the Presiding Officer is to look at size. I think the committee's approach, which I share, is to look at interconnectedness, to give regulators the ability to unwind organizations if they can't prove they have a rational way to be unwound through a bankruptcy process. Reasonable people can disagree, but we absolutely agree on the goal: making sure the American taxpayer never has to hear ``too big to fail,'' particularly too big to fail where the American taxpayer has to pay the bill. I thank the Presiding Officer for his comments. I know the debate will continue. Earlier today, my friend, the Senator from Arizona, spoke on the bill. As somebody who has been involved in portions of this bill for a number of months, the Senator from Arizona and I share common goals. We want to make sure that taxpayers are not exposed, that we end bailouts, and that we put rules of the road in place for the 21st century for the financial system. My hope is that in some of the workings between Chairman Dodd and Senator Shelby, they will find common agreement on titles Senator Corker and I worked on, where they might improve the initial draft. What I hear time and again from all of our colleagues is a commonality of goals. My hope is that at the end of the day we will have legislation that has broad bipartisan support. Let me go back to my colleague from Arizona. He had a strong preference for bankruptcy. His concern was that bankruptcy in every case can take care of every financial institution's unwinding, that bankruptcy provided predictability. He mentioned in passing a new concept called speedy bankruptcy and cited certain scholarly articles on it, speedy bankruptcy that had some portion of a certain aspect of the capital structure that would convert certain debt into equity in the event of this process. He made the comment that even having resolution in the process would always lead to bailouts. I respectfully disagree and want to take a moment to further explicate what Chairman Dodd's bill does in terms of how he approached these same issues in a bipartisan way. First, we believe the default option should always be bankruptcy. Bankruptcy is a clear and established set of rules. It gives creditors, equity holders a predictability about what happens in the event of a firm getting into trouble, getting into potential insolvency, and gives a path toward going out of business. But what we have seen at least to date is that bankruptcy sometimes is neither speedy nor, at least in its current form, always able to take care of enormously large, complex financial institutions. I believe it was at the end of last week that there was a story in either the New York Times or the Wall Street Journal that pointed out that the Lehmann bankruptcy process is still ongoing, with fees in excess of $400 or $500 million being charged to try to unwind this firm. One of the things I have heard is, if a firm goes into bankruptcy, there are these dollars that will still be needed to unwind the firm in an orderly process. Those of us who drafted the bill said that this unwinding process, if we are going to use resolution instead of bankruptcy, should be prefunded by the financial industry itself, which would benefit. My colleagues believe that perhaps it would be better if the Treasury or some other institution borrows money that then is repaid from the financial industry itself. Again, reasonable people can disagree whether we prefund or postfund, but the facts remain. The unwinding of any firm takes time and resources. At the end of the day, we have to make sure the taxpayer is protected. That is Point No. 1. Point No. 2. I agree with my colleague from Arizona when he says that a new tool we could use for these large, systemically important firms to make sure there was a price for them getting too large and there was an ability to make sure they could be unwound in a regular process would be the creation of a new form of debt in the capital structure, debt that, in the event of a crisis, would convert into equity, dilute existing shareholders--be, in effect, a check on management because they would also be diluted in this event. I urge my colleague from Arizona to recognize that we have put that into the bill already. We have created a convertible debt component that all of the systemically important firms would have to build into their capital structure and, in effect, would allow this to be triggered even prior to a crisis point. So rather than being used only at the moment of crisis, it could actually be used as a speed bump in advance as one of the early signs of a crisis coming. Again, it is one of the reasons why we have created a Systemic Risk Council that allows for higher capital requirements, focused on leverage, focused on better risk management plans, putting this new contingent debt structure within the overall capital structure of the institution. And there are the funeral plans, or the plans where we are asking, again, for these large institutions to outline how they will unwind themselves through a bankruptcy process. That process has to be approved by the regulators. It is a process whereby if the regulators do not approve it, they could actually come to the conclusion that there is no way to unwind this firm during bankruptcy and, consequently, they could actually do what the Presiding Officer requires and say: This firm then, consequently, has to be downsized--or certainly their international operations have to be split off or spun off because there is no appropriate way to unwind this firm in the event of a bankruptcy process. So again, I think the goal of my colleague from Arizona of making sure there is an orderly, planned approach through bankruptcy to unwind these large firms is in place. So we agree there. The fact that there is the creation of this new debt structure within these large firms--that would be debt that would convert to equity-- that is in the bill, and actually it is even better than what my friend, the Senator from Arizona, has proposed because it could be triggered even before a crisis. Where I guess I differ from my colleague, the Senator from Arizona, is that while he and I strongly believe in the bankruptcy process and the preference toward bankruptcy, we believe that in certain extraordinary cases--and if we have done our job, hopefully, extraordinary cases that rarely, if ever, may happen--you still have to have an ability to have a resolution authority. Why is this the case? Well, as we saw in the crisis in 2008, there were times when perhaps the balance of the industry realized that the firm was rapidly falling into insolvency, but as the firm went down this path toward insolvency, the management of the firm refused to recognize that, consequently potentially putting not only the firm in jeopardy but because of the fact that if that firm, in effect, fell fully insolvent, it could actually threaten the whole safety of the system. So after conversations with folks from across the political spectrum, we thought in these extraordinary times there needs to be this kind of trigger of last resort in terms of using a resolution process. It is a resolution process to put appropriate guardians in place, requiring the Treasury, the head of the FDIC, the head of the Fed, to all act in concert, to put a judicial check in place so, again, no future administration might overuse this power. As Senator Boxer's amendment will further reaffirm, resolution will mean the firm will go out of business, that equity will be toast, management will be toast, the unsecured creditors will be toast. This will be an effective death panel for a financial institution. As my colleague, the Senator from Arizona, has pointed out, at least if a firm chooses bankruptcy, they may emerge on the other side, out of the bankruptcy process, at least semiwhole. If you go into resolution, you are not coming out the other end. This will be like: Once you check in, you never check out. Your firm is going out of business. There may be parts of that firm, because they are systemically important--a clearing process, or some other systemically important part of this institution--that may have to be redeposited elsewhere. And it has to be done in an orderly process. But the firm, as it was priorly construed, will no longer exist. Never again will we do what we did in 2008, where the American taxpayer came in and shored up these firms in their current status. Resolution will never be chosen by any rational management team or any rational group of shareholders. I hope my friends, who want to make sure we end bailouts, who want to make sure we have an orderly process, will, again, recognize--and there may be ways to improve upon it--we have put together a bill that has a strong preference toward bankruptcy, that puts in place the requirement that the regulators have to bless this bankruptcy plan, no matter how complex you are, and if you cannot get that blessing then maybe parts of your institution need to be spun off in advance. We have already adopted the component of contingent debt that would convert into equity. Again, that threat of converting even in advance of a crisis will be a check on a management team that wants to take undue risk. There will be no existing shareholders who will want to be faced with what could be significant dilution even in advance of a crisis if the Systemic Risk Council said: Hold on here, you have now gone over that tripwire. You are going to get converted. You are going to get diluted. Again, it is another check on the management team. I do believe we have created a strong framework. But to ignore the fact that, as we saw in 2008, there may be times when either a management team fails to read the handwriting on the wall and declare bankruptcy or the crisis comes perhaps because of not even management malfeasance but because of a coordinated cyberattack or some other kind of catastrophic event that puts in jeopardy the system--to say never, ever could there be a time when we need an orderly resolution process to maintain the safety and soundness of the overall financial system, I believe, would be shortsighted. I look forward to continuing to work with colleagues on both sides of the aisle to try to get this right in the coming weeks. I commend the chairman and the ranking member, Senator Shelby. I hope they are having those conversations even as we speak. I look forward to continuing the conversation with the Presiding Officer on how we, again, can prevent these kinds of actions from even taking place in the first place. How do we deal with his approach of actually downsizing these institutions with bright-line rules or our approach that tries to look, perhaps, more at the interconnectedness but still grants that ability to the Systemic Risk Council if there is no way for an institution to demonstrate how it will unwind itself through bankruptcy? Again, reasonable folks can disagree. But none of us should disagree with the ultimate goal: ending too big to fail, making sure we no longer have even the potential of taxpayer exposure, trying to bring more transparency and fairness to this financial system, and, again, as the Presiding Officer and I have talked about before, making sure whatever comes out of this Chamber can stand the test of time so we can give the market the predictability it craves but also the security to the American people that we built ``financial rules of the road'' for the 21st century that will truly work. With that, Mr. President, I yield the floor. I suggest the absence of a quorum.

Mr. WARNER. I ask unanimous consent that the order for the quorum call be rescinded.

Mr. WARNER

Mr. WARNER. Mr. President, I ask unanimous consent that the Subcommittee on International Trade, Customs, and Global Competitiveness of the Committee on Finance be authorized to meet during the session of the Senate on April 29, 2010, at 1 p.m., in room 215 of the Dirksen Senate Office Building, to conduct a hearing entitled ``Doubling U.S. Exports: Are U.S. Sea Ports Ready for the Challenge?''

Mr. WARNER. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on April 29, 2010, at 9:30 a.m.

Mr. WARNER. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on April 29, 2010, at 10 a.m., to conduct a hearing entitled ``Short-Termism in Financial Markets.''

Mr. WARNER. Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate to conduct a business meeting on April 29, 2010.

Mr. WARNER. Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet during the session of the Senate to conduct a hearing entitled ``Meeting the Needs of Special Populations'' on April 29, 2010. The hearing will commence at 10 a.m. in room 430 of the Dirksen Senate Office Building.

Mr. WARNER. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on April 29, 2010, at 2:30 p.m., to hold a hearing entitled ``The Historical and Modern Context for U.S.-Russian Arms Control.''

Mr. WARNER. Mr. President, I ask unanimous consent that the Committee on Indian Affairs be authorized to meet during the session of the Senate on April 29, 2010, at 2:15 p.m. in room 628 of the Dirksen Senate Office Building.

Mr. WARNER. Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs' Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia be authorized to meet during the session of the Senate on April 29, 2010, at 2:30 p.m. to conduct a hearing entitled ``Developing Federal Employees and Supervisors: Mentoring, Internships, and Training in the Federal Government.''

Mr. WARNER. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate on April 29, 2010, at 10 a.m. in SD-226 of the Dirksen Senate Office Building, to conduct an executive business meeting.

Mr. WARNER. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on April 29, 2010, at 2:30 p.m.

Mr. WARNER. Mr. President, I ask unanimous consent that the Subcommittee on Consumer Protection, Product Safety, and Insurance of the Committee on Commerce, Science, and Transportation be authorized to meet during the session of the Senate on April 29, 2010, at 10 a.m. in room 253 of the Russell Senate Office Building.

Mr. WARNER

Mr. WARNER. I appreciate the opportunity to follow the chair and the ranking member of the Banking Committee and the chair and the ranking member of the Agriculture Committee on this critically important debate. I commend their work, the great amount of work that has been done, actually, in a bipartisan fashion already on this important piece of legislation. There are differences. But an awful lot of work has gone into getting this product that now can be fully aired on the floor of the Senate. I want to pay particular compliments to my dear friend, someone I had the opportunity to actually work for close to 30 years ago, the chairman of the Banking Committee, who, while I am a new guy in the Senate, seems to me, on this bill, has kind of done it the old- fashioned way. He has had an open door to any Member of both sides of the aisle. As this issue got more and more complex, he asked various members of the committee to roll up their sleeves and take on portions. Senator Corker and I--and nobody has been a better partner than Bob Corker for me during this process--took on a major portion of the bill. Then, as we kind of got to the Senate floor, time and again--and I will come back to certain specific examples--he has said: How can we find that common ground that seems to be so often missing from this debate? I also commend the ranking member, Senator Shelby. Nobody has been kinder and no one has spent more time with me kind of helping me learn the ropes of this institution than Senator Shelby. But I also have to say that as we get into the substance, some of the comments that have been made from my colleagues, particularly on the other side, do not resemble the bill we are actually starting debate on, particularly some of the portions in which I personally have been very involved. I want to try to address some of those briefly. In some of the comments we have heard from my colleagues, they have talked about that we did not put in too big to fail. If there was one overriding challenge that we were all tasked with--I believe my colleagues from the other side of the aisle would completely concur with this--it was ending too big to fail and never again exposing taxpayers to the financial mistakes made by large systemically important institutions, made by Wall Street. What I have not heard from my colleagues--and I guess this will be assent--is that a lot of the things that we have put in this legislation, bipartisan, take us down that path. We have created a systemic risk council so for the first time the regulators can actually get above their silo-like focus, so they can look ahead of the crisis and create early trip wires to make sure we do not get to the kind of catastrophic place we ended up in September of 2008. This systemic risk council will make sure that these systemically important firms--and there will be systemically firms no matter what we do--but that the price of getting so large will actually be borne by those institutions and not by the taxpayers. So what are those speed bumps, as I have called them? Increased capital requirements, making sure there is a better management of leverage, making sure they actually have in place risk management plans. Then we have created two brandnew tools that regulators have never had before. In fact, the price of getting so large, one is a whole new--and I apologize to my colleagues and those who are viewing because some of this is in the weeds, but the weeds are where billions of dollars are made or lost. But we are creating a whole new area of capital that is called contingent debt, that any of these firms will have to put in place. That debt will convert to equity and dilute shareholders and dilute management if any firm even gets close to getting into trouble. It will be an immediate check by current management on not getting too far over the edge, because we believe the bankruptcy process should be the way that firms unwind themselves; if they get into trouble, go into bankruptcy. They may or may not come out at the other end, but you have to have a plan in place. We have spent an awful lot of time looking back, back to the Bear Stearns crisis, the Lehman crisis, AIG. All of the stories show there was no plan in place for how to unwind these firms. So we have given this risk council the ability to require these systemically important firms to basically put forward a plan on how they will unwind themselves in bankruptcy at no risk to taxpayers. If the regulators do not approve, they have the ultimate sanction of actually being able to break up these firms. Now, time and again, in this legislation--and I hear some of my colleagues saying: We are going to always default to resolution. If this works, resolution should rarely and hopefully never, ever have to be called upon. But who would have ever predicted that we would have ever gotten to the point of complete financial meltdown of September 2008? So we cannot go responsibly forward without also having--and we heard this from people across the spectrum--without having some form of a resolution plan in place. There has been a great deal of comment made about the notion that the chairman's bill says we ought to go ahead and in effect ask these financially important firms to pony up a little bit of the resources so that if one of them gets into trouble and has to be unwound, there is some capital available to, in effect, keep the firm operating so the market doesn't lose faith in that institution and then create a financial run. We saw institutions that seemed to be very well capitalized but, because the market lost faith in them, their capital disappeared virtually overnight. You have to make sure there is an assurance that the firm can continue to operate and be out of business. Senator Corker and I looked at different options, but we thought perhaps the best way is to have some resources available, whether the number is $50 billion, as the chairman proposed, or a lesser amount, subject to valid debate, and perhaps the industry ought to be paying for that. I have heard others criticize that, but what I have not heard from my colleagues on the other side is, if the industry is not going to pay to keep these firms alive through the process of being put out of business--again, resolution means your firm is going out of business, your management is gone, your shareholders are gone, your unsecured creditors are gone. No rational management team would ever want this to happen. They would always prefer bankruptcy. That is how we have tilted this process. But if you are going to do that, you need to put them out in an orderly way. You don't want to have what happened when there was no plan to unwind Lehman. What I would ask is, if they don't like the prefund from industry--and some even in the Treasury don't like it-- then who will pay and how do we make sure taxpayers are not exposed? My two goals are--and I know Senator Corker agrees--that taxpayers should not be exposed, and you have to have some liquidity operating so you can keep the firm operating so you can put it out of business. I have also heard critiques that somehow in this process there would be some preference for one creditor over another. Nothing could be further from the truth in terms of what the Dodd bill proposes. It is as if somehow a whole new process was created out of whole cloth where somehow the firm that was going to be put out of business was going to be choosing which creditor was going to be paid or not paid. Nothing could be further from the truth. The model I believe the chairman's bill adopted was basically the model the FDIC uses as it puts banks out of business through the normal resolution process. The fact is, the FDIC is charged, as this resolution authority is charged, to say you have to maximize value as you put the firm out of business. So, yes, you may have to pay the electric bill to keep the lights on, but there will be a recoupment process at the end so that creditors balance out. It is not some new process. This has been used for decades relatively effectively. I also heard comments made about some new bureaucracy in the Office of Financial Resolution. Nothing could be further from the truth. One thing we heard time and again as institutions came in, as regulators came in, was that too often they didn't have current real-time data. So when AIG was going down, nobody knew the extent of the interconnectedness. When Lehman went down, nobody understood the state of their transactions. The Office of Financial Resolution that is proposed is to make sure that the regulators--experts from all across the field, not Wall Street--have real-time data on the state of interconnectedness of all the transactions that take place on a daily basis. To me this could be one of the most effective tools in this whole piece of legislation, making sure we have an immediate snapshot of the market. In the consumer area, I think there is, again, broad agreement that we need to improve consumer protections; that we ought to make sure financial products are regulated by the nature of the product, not by the charter of the organization that is issuing the product. There are still parts we need to work on. We need to make sure, particularly for community-based banks, that a community-based bank, a smaller institution that didn't create the crisis in the first place, doesn't have one regulator come in on a Monday on a consumer issue and another come in on a Wednesday on safety and soundness, and get conflicting advice. How we get enforcement right is an issue we have to work through. But again, common ground can be found on this issue. I commend the Agriculture chair and Senator Chambliss on the issue on derivatives. There has been a lot of discussion. There is an agreement that derivatives, while they have been oftentimes appropriately vilified as some of the tools that created the crisis, are also a useful way that legitimate businesses hedge risk. At the same time, as we try to put in place new rules around derivatives, we don't want to push the whole derivatives market offshore. While I commend the end-use exemption that was created and the goal of trying to get everything cleared and on exchanges, my hope is we can put some penalties in place. Some of the penalties the Agriculture Committee has put in place perhaps could be triggered if the banks do not end up meeting what they basically said, not overusing the end-use exemption or not getting all their products cleared or on the exchanges. My concern is that no matter how good the end-use exemption we write, there will always be more resources on Wall Street to find ways around even the best written legislation on something where as much money was put in place. So putting in place trip wires that might then cause a Draconian response would help self-police the industry. One more example of the approach Chairman Dodd has taken on this bill. In my background, I spent 20 years in the finance industry before I was Governor. I was in the early stage capital formation business, something that is very important in the tech community. A lot of firms that are thrown around on this floor and elsewhere I have been a client of, worked with, worked against. One of the areas I had great concerns about in an earlier draft was anything that might stop or slow the ability for startup companies to access capital. There were some provisions in the bill that looked at the definition of a qualified investor that could hurt the creation of angel investors which are so critical to creating new jobs. There were perhaps provisions put in around the SEC in terms of new deals that might have to be vetted for a long period. If you are a startup company, you don't have 120 days before you can raise your dollars to kind of get to the next step to stay alive. I cite these two examples because instead of simply saying no to the chairman, I said: Yes, you raise good points. Others have raised these points. They are changing the bill. I think that spirit is what the chairman is going to bring to the debate. In the 20 years of being in the finance business or around the finance business, I came to this body thinking I might know a little something about this subject. There was probably a month in which I realized that whatever I knew was incremental and that the last year and a half I have had to go back and retest all of my assumptions. It has been an enormously challenging and exciting experience. I come away from this year and a half--again, particularly working with Senator Corker, where we had everybody from across the political spectrum talk to us to get us up to speed on these issues--with a couple conclusions. One, there is no Democratic or Republican solution to financial regulatory reform. If there is ever an area that should not be broken down on partisanship, it is this issue. Second, what the market craves most is predictability. Sometimes it is overstated: if you do this, oh, my gosh, it will be the death knell of American capitalism--there has to be balance. But oftentimes those statements are overstated. At the end of the day, what the market wants is a good, commonsense bill that will set the tone, not just for the next year or two but for the next 20 to 30 years. Finally, because of the good work of Chairman Dodd, Senator Shelby, and many others, common ground is attainable. I look forward to spending as much time as needed and appreciate in particular those on the Republican side who agreed to bring this bill to the floor and no longer are there going to be political shenanigans; let's air these issues back and forth. There is a lot more to say about some of the critiques that are made of the bill. I look forward to that discussion and look forward to working toward that common ground so we end up with 21st century financial rules of the road. I yield the floor.

Mr. WARNER

Mr. WARNER. Madam President, let me thank my colleague from Colorado, a member of the Banking Committee, who has been part of trying to get this bill right over the last 14, 15 months. He has spent a career in the private sector, as I did. I think we both can read a balance sheet. We both understand it is the capital markets that drive the American economy. I think we both agree we want to keep America the capital of capital formation for the whole world. We don't want this to migrate to London or Shanghai or elsewhere around the world. We also know 18 months after we came to the precipice of a financial meltdown ought to be enough time to put rules of the road into place so we can give the market what it craves most, which is predictability. I will not go on at length. I had the opportunity earlier when the chairman was here, and I think, unfortunately, I probably spoke for about 40 minutes going through how we got to this point and all the things in this bill to put these new rules of the road in place. I will only make two or three quick points. One, in my 15 months here, as a new guy, I have never seen a bill that has had more bipartisan input than this piece of legislation. I had a great colleague in Senator Corker from Tennessee. We worked on the too-big-to-fail and the resolution piece. There are places that can still be improved. I would love to work with Senator Corker on some technical amendments to make this better. But this was a bipartisan piece of legislation. Two, I actually think there is a great deal of agreement on both sides of the aisle about our policy goals. I am not talking about the role of government or who should get covered or not covered, the way it was with health care. We all agree, no more taxpayer bailouts, more transparency, that there ought to be some sense of fairness in the financial system, and that consumers ought to know the financial products they are using and buying, or mortgages they are making have some basic underlying protections. I have yet to hear any of my colleagues on the other side disagree with those basic premises. I think we are still working toward what I hope will be, as opposed to some of the disappointments that have come out of this Chamber, something we can all be proud of and something the American people can be proud of in that we found some common ground. I have to acknowledge, I am not a very good political prognosticator. I assumed last week there was an 80-percent chance we would get a bipartisan bill. I still believe that. I am not sure anybody who is listening tonight understands procedurally why our colleagues who share the same goals, those of us who have been working in bipartisan teams, who have amendments that will help strengthen the bill, shouldn't be spending tonight talking about those amendments, offering those amendments, offering those improvements, having those who disagree debating, when there was a bipartisan product to date and will be a bipartisan end solution, I believe. The American people demand, 18 months after the fact, that we put these new financial rules of the road in place. Unlike many of my colleagues, I get to go home to Virginia tonight. If I run into a Virginian who wants an explanation of why we are not on the bill, I would not know what to tell them. My friend from Colorado spent the weekend crisscrossing Colorado. He is asking folks to rehire him. I share he is head scratching on why we aren't here talking about something on which there is not major policy differences. There is common agreement that we need to have reform, and a lot of the reform parts there is agreement on. Where there is not agreement, there is actually more bipartisan consensus on the form of the amendments. I would love to hear from the Senator from Colorado.

Mr. WARNER. Mr. President, I rise today to urge my colleagues to support bringing forward Chairman Dodd's regulatory reform bill. The chairman has just spoken with great passion about how we got here. I want to take perhaps somewhat of a similar tack and describe, as a new Member, why I think this legislation is so terribly important. I have had the opportunity today and on other Mondays, as is often noted, to sit in the chair and listen to my colleagues come in and talk about this issue. I heard today my colleagues talk about health care, talk about stimulus, talk about unemployment, as somehow reasons why we should not start a debate about financial regulatory reform. I am not sure I understand the connection. Candidly, the American people could do with a little less political theater and a little more action. Regardless of what happens this afternoon at the vote at 5 o'clock, I hope--and I honestly believe most of my colleagues on both sides of the aisle hope--that we will get to that agreement in a bipartisan new set of rules of the road for the financial sector that will stand the test of time for not a year or two but for decades to come. Before I get into a substantive discussion about how we got here and how I believe the Dodd bill takes dramatic steps forward, there is one other issue I need to address. I have sat in the chair as the Presiding Officer and have heard--and I know as Presiding Officer we have to bite our tongues sometimes--colleagues come forward and somehow portray this piece of legislation as a partisan product. I have only been here for 15 months but in the 15 months I have had the honor of serving this body, I have not seen any piece of legislation that anywhere approaches the type of bipartisan input, discussion, and ongoing dialog that Chairman Dodd's bill has. Literally, in the 15 months I have had the honor of serving on the Banking Committee, we held dozens if not hundreds of hearings on the objectives of this legislation, objectives, again, that I think colleagues on both sides of the aisle agree upon: making sure there is never again taxpayer bailouts for mistakes made by too large financial institutions, making sure we have more transparency and, as the chairman said, a return of a sense of fairness to our whole financial product system and, third, that ultimately the American people, the consumers of this Nation, will make sure there is somebody watching out for the financial products that sometimes they have been purchasing without appropriate knowledge or appropriate recourse, when these products explode in their faces. Again, unlike the Presiding Officer who served around this body for many years, I am a new Member. But I saw where the chairman did something I thought was somewhat unusual with a major piece of legislation. Rather than saying he had all the knowledge and all the input, he actually invited in the members of the committee, junior members, senior members of both parties to set up working groups to take on some of the challenging aspects of this bill--consumer protection, systemic risk, corporate governance, the whole question of derivatives. Let me state absolutely, because I can state from the systemic risk/too big to fail portions, the products we developed that are critical parts of this legislation are bipartisan in nature, bipartisan in ideas, and find that common ground that has been so absent from so many of the previous debates we have had over the last 15 months--I think particularly about the fact of the systemic risk, too big to fail, and resolution authorities Senator Corker and I worked on. There has been no better partner I could have had than Senator Bob Corker, grinding through hundreds of hours, recognizing there was no Democratic or Republican response to systemic risk and too big to fail, but we had to get it right. While there may be parts of this bill that can still be tightened and need to be tweaked here and there, and the Senator and I may add a few improvements, on the overarching goal of making sure the taxpayers never again would be on the hook, I believe we have taken giant steps forward. As you heard from the chairman already, those conversations are ongoing even today. Please, while we kind of get sometimes subject in this body to hyperbole, anyone who makes the claim that this legislation is partisan only doesn't recognize the facts or has not seen the experience of the members of the Banking Committee over the last 15 months. Let me also acknowledge--and I recognize I have a number of things I want to say and maybe other Members want to come, but let me acknowledge something else about this discussion. Sixteen months ago, when I came to this body, I actually thought I knew something about the financial services sector. I spent 20 years prior to being Governor around financial services, taking companies public. I had some ideas about how we would sort through these issues. I have to tell you what I quickly found was that oftentimes my original idea, or oftentimes the simplistic sound bite solution that I thought might be the solution, more often than not proved not to be the case and that trying to sort our way through this labyrinth of financial rules and regulations in a way that brings appropriate regulation but maintains America's preeminent role as the capital markets' capital of the world has been challenging. Again I thank my colleague Senator Corker. I think we both realize there is no Democratic or Republican way to get this right but we had to get it right. Over the last year we have set up literally dozens of seminars where we invited members of the Banking Committee to come in and kind of get up to speed as well. Fifteen months later, with this legislation now before the floor, I think we have taken giant steps forward in getting it right. I also want to revisit for a moment, before we get to the substance of the bill, how we got here. I have actually been stunned sometimes, sitting in the Presiding Officer's chair, hearing colleagues come in and try to cite as the causation of the crisis that arose in 2007 and 2008 a single legislative action back in the 1970s or a single individual's activities over the last two decades. The claims are so patently absurd, sometimes they do not even bear recognition or bear rebuttal. But it is important to take a moment to look back on the fact that none of us comes with clean hands to this process of how we got to such a mess in 2008 that we were on the verge of financial meltdown. Think about the fact back in the early 1990s, back in 1993, Congress actually passed legislation to give the Federal Reserve the responsibility to regulate mortgages--responsibility that we have seen time and again they didn't take up the challenge to meet. The Presiding Officer spoke very eloquently earlier this afternoon about the actions of Congress in 1999, the Gramm-Leach-Bliley bill, that basically broke down the walls between traditional depository bank and investment banking that had been set up by the Glass-Steagall Act in the early 1930s. Where the Presiding Officer and I may differ now is I am not sure we can unscramble those eggs, but clearly we needed a little more thought back in 1999, as we internationalized our financial markets and turned these large institutions into financial supermarkets, which was one of the precipitating factors in this crisis as well. Candidly, bank regulators were not given the tools to regulate, and oftentimes regulators of both depository institutions, their bank holding companies, and their securities firms, had no collaboration or coordination. During our hearings in the Banking Committee when we looked into one of the most egregious excesses in the last few years, the Bernie Madoff scandals, we heard regulators had started down the path to try to find out the source of some of the criminality that took place in the Madoff case, only to find because of our mismatch of regulatory structure they got to a door they couldn't open because that was the purview of another regulator. Regulators, under our existing rules, were actually prohibited from looking at derivatives. Derivatives, as the Chairman mentioned, in the last decade have gone from what seems like a large number--$90-plus billion--to literally hundreds of trillions of dollars in value. Responsibility continues, again, in some of our monetary policy. In the early part of the 2000s--and again, not many people sounded the alarm at that point. We overrelied on low interest rates and monetary policy to pull us out of the 2001 recession. But as we came out of that 2001 recession, we left those monetary policies in place, which led to a housing bubble for which we are still paying the price. I know some of my colleagues on the other side said this bill does not take on the GSEs, Fannie Mae and Freddie Mac. And, yes, to a degree, they are right. And then, in a subsequent action, we will have to make sure we have a new model in place for these institutions. But that should not be used as an excuse to not put in place major financial regulatory reform. Candidly, if we are going to be really truthful with each other and the American people, we have to acknowledge that everyone--not just the banks but everyone--got overleveraged. Quite honestly, we all, the American people, probably need to take a look in the mirror as well. I think, as we bought those adjustable rate mortgages; took out that second and third loan on our home; ended up getting that deal that seemed too good to be true; moved away from the conventional idea that you ought to go ahead and, before you get a mortgage, be able to put 20 percent down and be able to show you can pay it back, we all got swept up in this ``who cares about tomorrow; let's just borrow for today.'' We also saw innovations, and American capitalism has worked pretty well, particularly in the last 100 years. But we particularly saw innovations in the last 5 or 6 years alone, innovations that originated on Wall Street that were supposed to be about better pricing risks: derivatives and all of their cousins, nephews, and bastard offspring. But these tools that were supposed to be a better price risk we have now found were more about fee generation for the banks that created them and, instead of lowering overall risk, created this intertangled web that, once you started to put the string on, potentially brought about the whole collapse of our markets. Time and again, we saw, rather than transparency in the market, opaqueness and regulators who never looked beyond their silos. I think most all of our colleagues want reform. Colleagues on both sides of the aisle want to get it right. But I believe there are two real dangers as we go down this reform path. One is to resort to sound- bite solutions that at first blush sound like an easy way to solve the problem but in actuality may not get to the solution we need. I know we are going to have a fervent debate on this floor--and I look forward to it--about the question of whether the challenge with some of our institutions was their market cap or was it really putting pressure on the regulators to look at their level of interconnectedness and the level of risk-taking that was taking place. I look forward to that. There are valid points on both sides. When we get to that debate, I will point out the fact that in Canada, where there is actually a higher concentration of the banking industry than in the United States, because there was greater regulatory oversight and actual restrictions on leverage, those Canadian banks didn't fall prey to the same kind of excess we found here in the United States. I know the chairman and Chairman Lincoln are working through the question of derivatives, where they should be housed, because they do provide important tools when used properly. And there will be a spirited debate on whether we should break off derivatives functions from financial institutions. I look forward to that discussion. By simply breaking off these products into a more unregulated sector of the industry, we could, in effect, if we do not do it right, create an even greater harm down the road than we have right now. So the first challenge is to make sure we don't fall prey to the simple solutions and recognize the complexities of these issues. The other challenge we have to be aware of is the converse. I know the chairman has heard, I know the Presiding Officer has heard--any of us who have tried to get into this issue have had folks from the financial industry come in and talk to us about the unforeseen consequences of any of our actions. Some of those arguments are valid, but oftentimes those arguments are simply--they always start the same: We favor financial reform, but don't touch our portion of the financial sector because if you do this, the unintended consequences would be enormous. Because the knowledge level and the complexity of these discussions are so challenging, what we also have to fight against in this body is the more easy process to default to the status quo because timidity in this case will not solve this crisis and will not provide the new 21st- century financial rules of the road we need. We can't be afraid to shine the light on markets or, for that matter, to raise the cost of certain activities, because the unforeseen consequences of the interconnection of these activities, as we saw in 2007 and 2008, pose grave risk to our financial system--and as we have seen with the 8 million jobs lost and literally trillions of dollars of value lost from the American public. So what does S. 3217 do to accomplish this? I spent most of my time on the two titles that Senator Corker and I worked on and the chairman and his staff adopted and changed a bit but that still provide the framework and, I believe, the right structure. First--the chairman has already mentioned this--we create for the first time ever an early warning system on systemic risk. If there is one thing that has become clear from all of the hearings that have been held, not just at the Banking Committee but under Senator Levin's Investigations Committee and Chairman Lincoln's Agriculture Committee, it is that there was very little combination and sharing of information between the regulatory silos. The chairman's bill creates a nine-member Financial Oversight Council chaired by the Treasury Secretary and made up of the Federal financial regulators. This group will bear the responsibility, both good and bad, if they mess up, of spotting systemic risk and putting speed bumps in place because we can never prevent another future crisis, but to do all we can to slow and minimize the chance of those crises. The most important part of this systemic risk council is it will actually share information, so no longer will we have one regulator who is looking at the holding company, another regulator looking at the depository institution, a third looking at the securities concerns and not sharing that data. We will place increased cost on the size and complexity of firms. The largest, most interconnected firms will be required--not optional but required--to have higher capital, lower leverage, better liquidity, better risk management. Those have all been traditional tools that have already been in our regulatory system, but this systemic risk council will require those large institutions to meet all of these higher costs--in effect, their cost of being so large and interconnected. But what we are also bringing to the table are three brandnew tools that I think, if executed and implemented correctly, will provide tremendous value in preventing that next financial crisis. Those three tools are contingent debt, our so-called funeral plans, and third, the Office of Financial Research. Since these are new tools, let me spend a moment on each. One of the things we saw in the 2007, 2008 crisis was that as these firms got to their day of reckoning, it became virtually impossible for them to raise additional capital and shore up their equity. Once they start going down the tubes, the ability to attract new investors, particularly from a management team that sometimes doesn't recognize how far and how close they are coming to the brink, is a great challenge. So working with folks from the Fed and experts across the country, this bill includes a whole new category within the capital structure of those large institutions: contingent debt. There will be funds within the capital structure that will convert into equity at the earliest signs of a crisis. Why is this important? This is important because if this debt converts into equity, the effect it has on the existing shareholders is it dilutes them. It takes money right out of their pockets. So existing shareholders will have a real incentive to hold management accountable, not to take undue risks, because long before bankruptcy or resolution we will be able to have this trigger in place that will convert this debt into equity, diluting existing shareholders and, candidly, diluting management as well. How effectively we use this tool has yet to be seen, but it will provide another early warning check on these large institutions. The second new addition to the chairman's bill is basically funeral plans for these large institutions. What do I mean? I mean a management team will have to come before their regulators and explain how they can unwind themselves in an orderly way through the bankruptcy process. We heard stories--I will not mention the institution--we heard stories in the height of the crisis in 2008 about how certain very large international institutions in effect came before the regulators and said: You have to bail us out because we cannot go through bankruptcy; it is just too hard. Never again should any institution be allowed to be in that position. And if we use this tool correctly--this is an area where I know the Presiding Officer has great interest--if the regulator does not sign off on the funeral plan for this institution, on how it can unwind itself, even with many of its international divisions, through an orderly bankruptcy process, then the regulator can, in effect, make this institution sell off or dispose of parts that can't be done through a regular order of bankruptcy. By doing this, we create the expectation in the marketplace that bankruptcy will always be the preferred option. Never again will there be an excuse that, we are too big and too complicated to go through that orderly process. Creditors and the market will know there is a plan in place that has to have been approved by the regulator and constantly updated so we have a way out. The third area--again, I was very pleased to hear the chairman mention this because within the press and the commentary, it has gotten no information or no focus at all--is the creation of a new Office of Financial Research within the Treasury. One of the things we heard time and again from regulators as we kind of went back and looked at how we got in the crisis of 2007 and 2008 was that the regulators didn't realize the state of interconnectedness of some of the institutions they were supposed to be regulating. No one had a current, real-time market snapshot of all of the transactions that were taking place on a daily basis, so nobody knew what would happen if you pulled the string on AIG, even though it was their London-based office, what would happen if those contracts suddenly all became suspect. By creating this Office of Financial Research, we will give the regulators and the systemic risk council, on a daily basis, the current state of play across all the markets of the world. This tool, if used correctly, would be another terribly important early warning system. But as the chairman has mentioned, with all this good work, we still can't predict there will never be another financial crisis. Chances are Wall Street and others, creativity being what they are, will find some way, even with all this additional regulatory structure and oversight. We can never predict there might not be another crisis. So what do we do? First and foremost, what this bill puts in place is a strong presumption for bankruptcy so that creditors and the market alike will know what happens if they get themselves in trouble. Particularly for these largest institutions that are systemically important, they will have to have their preapproved, in effect, bankruptcy funeral plan on the shelf so that we can pull that off in the event of a crisis and allow the institution to go through an orderly bankruptcy process. Again, bankruptcy will be the preferred option of any reasonable management team because through bankruptcy there is at least some chance they may emerge on the other side in some form or another. They may be able to keep their job, if they are part of management. Some shareholders may still have some equity remaining. What happens if we have a firm that doesn't see the inevitable and isn't willing to move to bankruptcy? What happens if we have a circumstance where the failure of an institution could cause systemic risk and bring down the whole system? With an appropriate check and balance--and again, I commend Senator Corker for his additions--in effect, simultaneous action of three keys: the Treasury Secretary, the head of the Fed, the FDIC, and additional oversight--all of these actions taking place, there then is an ability to say, how do we resolve an institution, in effect put it out of business--unlike in 2008 where the government invested, in effect, in a conservatorship approach that said: We will prop you up to keep you alive because we don't know what to do with you to keep you alive because you are so large and systemically important. We have created in this bill a resolution process that says: If you as a management team are crazy enough not to go into bankruptcy, but actually allow resolution to take place, you are going out of business. Senator Corker said: You are toast. Your management team is toast. Your equity is toast. Your unsecured creditors are toast. You are going away. Again, we are going to put this institution out of business in a way that does not harm the overall financial system. We have to have an orderly process. We saw during the crisis of 2008 what happens when one of these institutions fails without any game plan. We saw the value of these institutions disappear overnight as confidence in the market, confidence within the market in the institution was lost. So working with my colleagues and experts from the FDIC and others, we said: What you have to do is, you have to have some dollars available to keep the lights on so that you can sell off the portions of the institution that are systemically important and unwind this in an orderly way that doesn't have an effect, the equivalent of a run on the bank or a run on the financial system. Again, we have heard critiques of the approach Senator Corker and I came up with in this resolution fund, this ``how do you put yourself out of business in an orderly way'' fund. We actually thought it ought to be paid for by the financial industry, with the ability then to have that fund, in effect, replenished after the crisis is over. I saw polling today that shows the overwhelming majority of Americans actually think the financial sector ought to bear the cost of unwinding one of these large, systemically important firms. Let me say, if there are other ways to do it--as a matter of fact, some in the administration have suggested other ways--I am sure we can find common ground as long as we do have at least two principles: First and foremost, the taxpayer must be protected, and industry, not the taxpayer, has to take the financial exposure. Second, funding has to be available quickly to allow resolution to work in a way to orderly unwind the process. But it ought to be done in a way--again, this is where some of the judgment comes in--where there is not so much capital available that we create a moral hazard, but a bailout fund is created. Personally, I believe the House legislation goes too far in creating a fund of that size. I think the chairman's mark strikes a much more appropriate balance. But if there are ways to do this that protect the taxpayer, allow speedy resolution with funds that will be available so we don't have a run on the market, a run on the institution that creates more systemic risk, as long as the industry at the end of day is going to pay for it, I am sure there are other ways and we can find that common ground. What we did in this process of resolution is we said: Let's take what is working. Let's see what is best from the FDIC process which currently resolves banks on a regular basis. One of the things I have heard from some of my colleagues on the other side--I don't know about their community banks, but my community banks in Virginia; I would bet the community banks in Delaware and the community banks in Connecticut--we don't want to get stuck paying the bills for the large Wall Street firms that bring the system to the brink of financial catastrophe. So, again, one of the aspects of the chairman's bill is to make sure any resolution process does not burden, charge, or in any way otherwise interfere with community banks. What we think we have struck is a process that puts costs on those institutions that make the business decision to get large and systemically important. We think we have put in place abilities for the regulators, with the funeral plans, to make sure if this interconnectedness is so large that they can't go through bankruptcy, then we can stop them from taking on these new activities. But because we can't always predict eventuality, we have then said: If you need to use a resolution process, let's make sure it is orderly, paid for by industry, and that you have stood it up in a way that no rational management team would ever expect or want to choose resolution. I know my colleague from New Hampshire has been a great partner in this legislation and is on the Senate floor. I will end with just a couple more moments. There are other parts of this bill that have not received a lot of attention. In this bill, the chairman has included an office of national insurance. One of the things we saw in the crisis in the fall of 2008 was that nobody knew how entangled AIG's activities were with the whole financial system. This doesn't get to the question of who should regulate insurance companies, but it does create at the Federal level at least the knowledge within the insurance sector of its interconnectedness. The chairman has mentioned that he and Chairman Lincoln are working to grapple through one of the toughest parts of the bill--again, an area I know my colleague, Senator Gregg, has been working on: How we get it right around derivatives. Again, there is no policy difference. Both sides agree derivatives are an important tool when used appropriately. Particularly industrial companies need to use the derivative to hedge against future risk within their business. The challenge is, how do we not draw that end user exemption so large that every institution on Wall Street suddenly transforms itself into an industrial end user. Secondly, while these contracts are unique, they have to have more light shown on them in terms of clearing and exchanges. I know Chairman Dodd and Chairman Lincoln and Senator Reid and Senator Gregg will be working through this. One suggestion I would have--because as someone who has seen Wall Street act time and again, I wish them all the luck--part of my concern is that whatever rule we come up with, there is so much financial incentive on the other side that a year or two from now, we may be back because they found a way around it that we again need to give the regulators certain trip wires. I, for one, believe we ought to take the industry at its word. The industry says end users are only going to be 10 percent of total derivative contracts. Then let's put that in as a regulatory goal. If they end up exceeding that, then we can bring draconian consequences to bear. Or if they say, yes, we can make most of these transactions and most of these contracts transparent through clearing or exchange, great; let's accept them at their word. But if they don't get to those totals, then perhaps some of the actions that particularly Members on my side of the aisle would like to take can be put in place. But, again, folks of goodwill can find common agreement. Finally, the area around consumer protection, where the chairman and the ranking member have worked at great length to kind of sort this through, everybody agrees on the common goal. There needs to be enhanced consumer protection, particularly for the whole nonregulated portion of the financial industry that now exceeds the regulatory half. Too often it was the community bank that was chasing the mortgage broker on some of the bad financial products because there was no regulation on the mortgage broker to start with. So, again, there will be differences, but I think the approach of the chairman, which is to keep this with the appropriate rulemaking ability but to make sure, particularly for those smaller banks, that we don't end with conflicting information of a consumer regulator showing up on Monday and a safety and soundness regulator showing up on Wednesday, to do that in a combined fashion so there is commonality of message, particularly to smaller banks, that strikes that right balance. Again, I can only say for the banks in my State of Virginia, those smaller banks who oftentimes have said they didn't cause the crisis-- and they didn't--they are the first to say: We need enhanced consumer protection to make sure that our financial products are regulated by the type of product, not by the charter of the institution that issues the product. There may be ways to improve on this section. But, again, I think Senator Dodd and Senator Shelby are working to get it right. We have seen, as well, major action on the rating agencies, questions around underwriting. There are tremendous parts of this bill that haven't been the subject of great criticism because they are that common ground that, I think Senator Shelby has said in earlier quotes, 80 or 90 percent of both sides agree on. Where we don't agree, we ought to debate and offer amendments. I look forward to candidly working with a number of colleagues on the other side of the aisle on technical amendments to this bill where we think we can make it slightly better. But if we are going to get there, we have to get to the debate. I hope we move past procedural back-and-forth that, as a new guy, I still don't fully understand. I think it is time to fully debate this bill out in the open. The chairman made mention of what has been taking place in the last few weeks in Greece. I know the Presiding Officer has helped educate me on a whole new activity that is taking place in the financial markets right now around high-speed trading and co-location that could be the forbear of the next financial crisis. How irresponsible would we be, 18 months after, again, the analogy of the chairman, after our house was broken into, when we haven't even put new locks on the door, if we ended up with another robbery, whether it was caused by internatinoal action or whether it was caused by high- speed trading, because we don't have new rules of the road in place? In the 15 months I have had the honor of serving in the Senate, I can't think of a piece of legislation that better represents what is good about the Senate, folks on both sides of the aisle coming forth with their ideas, trying to fashion a good piece of legislation. I can't think of an area where there is less traditional partisan, left versus right, Democrat versus Republican divides. I can't think of an applause line better, whether I am talking to a group of liberal bloggers or folks from the tea party, than the notion that we have to end taxpayer bailouts. I urge my colleagues on both sides of the aisle, let's get through the procedural wrangling. Let's find that common ground that I think we are 90 percent of the way there. Let's pass a bill that gets 60, 70, 80 Members of the Senate and set financial rules of the road that will last not just for the next congressional session but for decades to come. I yield the floor.

Mr. WARNER. Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. WARNER. Again, one final comment. I know the Presiding Officer is a new Member as well. This is one of those moments when there has been a year and a half of bipartisan work that has gone on, when there seems to be a commonality of interest in what the goals of financial reform are. I don't know about the Presiding Officer, I don't know about my friend from Colorado, but I never got the memo that said our job wasn't actually to get stuff done. There were legitimate, major policy differences in the health care discussion. But in this discussion, there are things that need to be worked out, but the goals we have all agreed on. The bipartisan working groups have been at it for more than a year. I implore my colleagues from the other side of the aisle, I don't know if maybe there was some procedural shenanigans, that kind of back and forth. But I hope my colleagues from the other side of the aisle--I see my colleague actually who has great expertise in the financial sector, the new Senator from North Carolina coming in--some of the newer folks, whatever the reason our colleagues on the other side didn't want to get to a real discussion of the bill, I hope they can come back later tonight, first thing tomorrow, and we can move to this bill, talk about it, put forward those amendments. I know I will have some bipartisan amendments to make the bill stronger. I know my colleagues will. At the end of the day, let us get the people's business done. As my friend has said, the Dow may be back north of 11,000, but that doesn't mean much if you don't have a job. One of the ways we can guarantee the financial markets will continue to have the capital to make the loans, to make the investments, to create that next wave of jobs is to make sure we have in place financial rules of the road. I thank the Chair and yield the floor.

Mr. WARNER

Mr. WARNER. Mr. President, I ask unanimous consent that Bau Nyugen, a fellow in my office, be granted the privilege of the floor during consideration of S. 3217, the Restoring American Financial Stability Act of 2010.

Mr. WARNER

Mr. WARNER. Mr. President, I appreciate that. I have a question. I appreciate the comments of the Senator from North Dakota, and I agree with his comments. I have to say--and I know some of my colleagues were here earlier. Before I came to this body, I spent a career as a CEO of a business and a CEO of a State. While I have great respect for this body and the rules and traditions of this body, something seems a little strange when 15 months into a new administration, this President can't get his nominees up for a straight up-or-down vote--put the management team in place. If there is a challenge or a problem with the qualifications of the gentleman the President proposes to be the head of the Corps of Engineers, we ought to debate that and vote him down, but he should not be held in this kind of gray secret hold or this area of abeyance. A number of my colleagues have spoken about this already. All of the freshman and sophomore Democratic Members--and I am sure we would welcome our Republican colleagues to do the same--are saying this process of putting people on hold, particularly seeking holds that have no relationship to their qualifications for the job, is wrong. I don't know how to answer this when people around Virginia ask me: Why can't you get stuff done, and why can't these things be moved forward? So a number of us--we may be new to the body, but just because of the very action that is being debated right now--are going to continue to press this issue. I commend the Senator from North Dakota. Again, is the Senator from North Dakota aware of any substantive reasons this man who served our country for so long in our military should not be confirmed as the head of the Army Corps of Engineers?

Mr. WARNER

Mr. WARNER. Madam President, again, there are judicial nominees and there are administrative nominees. I ask my friend, the newest Member of the Senate, who comes from a different business than I--I came from the telecom business and he comes from a different business.

Mr. WARNER. What we have heard in the case of Pennsylvania, as we heard from all of us, is frustration. As the Senator from Colorado said, folks who have legitimate complaints about an individual, whether they are a judge or a Presidential appointee, ought to bring them to the floor and debate them. While we want to be respectful of Senate traditions, I think allowing the process to go along without using the existing rules to try to force us to confront these issues does not make any sense when our country faces many enormous challenges. I call on my good friend from Colorado who, while he served in the other body, has obviously had a longtime family tradition of public service. I am sure the folks in Colorado are scratching their heads about the rules under which we operate.