Merkley: U.S. Economic Stability Demands Strong, Consistent Global Standards

Merkley: U.S. Economic Stability Demands Strong, Consistent Global Standards

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.”