Ted Kaufman - United States Senator for Delaware

In Speech Before Members of Investment Community, Kaufman Calls on Industry to Restore Credibility of Financial Markets

Delaware Senator urges National Organization of Investment Professionals to support meaningful financial reform

April 20, 2010

WASHINGTON, D.C. – In a speech before the National Organization of Investment Professionals (NOIP) Tuesday, Senator Ted Kaufman (D-Del.) told its members that the “credibility of our markets has been badly damaged” and that both Congress and the investment community “must work together to restore it and ensure that we don’t have another crisis that damages it further still.”
 
In remarks at the organization’s spring conference, Kaufman detailed his vision for meaningful Wall Street reform – from ensuring no bank is ever again “too big to fail;” to demanding transparency of derivatives, high-frequency trading and other opaque market practices; to restoring the rule of law with clear and enforceable regulations.

Kaufman once again called for reinstating a modern-day version of Glass-Steagall, and the separation of commercial banks from their investment banking functions. “When mega-banks fail, their interconnected nature inevitably leads to a systemic risk, a collapse in confidence and the classic patterns of a bank run. By splitting up these mega-banks, we by definition will make them smaller, safer, and more manageable,” he said.   

“I know you all feel like you work in a highly regulated environment,” Kaufman continued. “If you could, you would no doubt want to corner me after this speech and tell me about all the rules and paperwork and audits and examinations that each of you and your firms must endure.  That may be the case.  But something is nonetheless deeply, deeply amiss.  To the rest of America, it appears that Wall Street’s entire culture has descended in a spiral of greed and corruption – and that spiral came very close to taking the rest of the country down with it.”
 
Since taking office in the immediate wake of the financial crisis last January, Kaufman has led the charge for strong financial reform, both on Wall Street as well as in our capital markets. In a series of recent Senate floor speeches <http://www.kaufman.senate.gov/issues/issue/?id=D24B4D96-D93F-4D9C-9E08-2122FB2C6FAF <http://www.kaufman.senate.gov/issues/issue/?id=D24B4D96-D93F-4D9C-9E08-2122FB2C6FAF> >, Kaufman has argued that current financial reform legislation before the Senate does not go far enough to address the continuing threat posed by the concentration and interconnectedness of the nation’s biggest financial institution.  

NOIP is a nonprofit association which includes chief executives, institutional traders and managers for registered investment advisors as well as brokerage firms, and representatives of major stock exchanges and ECN's, including floor brokers and specialists. Members and the firms they represent trade approximately 70 percent of the institutional volume transacted daily in the New York and Nasdaq markets.

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