Chairman Johnson, Rankin' Memba' Shelby, and oda' members uh de Committee, dank ya' fo' de oppo'tunity t'testify about da damn Federal Reserve's implementashun uh de Dude-Frank Wall Street Refo'm and Consuma' Protecshun Act uh 2010 (da Dude-Frank Act).
De Dodd-Frank Act addresses critical gaps and weaknesses in de U.S. regulato'y framewo'k, many uh which wuz revealed by de recent financial crisis. De Federal Reserve be committed t'wo'kin' wid de oda' U.S financial regulato'y agencies t'implement da damn act effectively and 'espeditiously. Slap mah fro!
We is also coopuh'tin' wid our internashunal counterparts t'furda' strengden financial regulashun, t'ensho' man some level playin' field across countries, and t'enhance internashunal supuh'viso'y coopuh'shun. And we gots revamped da damn supuh'viso'y funcshun at da damn Federal Reserve t'allow us t'betta' meet da damn objectives uh de act. Man!
De act gives de Federal Reserve impo'tant responsibilities bod t'make rules t'implement da damn law and t'apply de new rules. In particular, de act requires de Federal Reserve t'complete mo'e dan 50 rulemakin's and sets uh fo'mal guidelines, as well as some numba' of studies and repo'ts.
We gots also been assigned fo'mal responsibilities t'consult and collabo'ate wid oda' agencies on some substantial numba' of addishunal rules, provisions, and studies. So's dat we meet our obligashuns on time, we is drawin' on 'espuh'tise and resources fum across de Federal Reserve System in bankin' supuh'vision, economic research, financial markets, consuma' protecshun, payments, and legal analysis.
In all, mo'e dan 300 homeboys uh de Federal Reserve staff is wo'kin' on Dude-Frank implementashun projects.
We gots created some senio' staff posishun t'coo'dinate our effo'ts and gots developed project-repo'tin' and trackin' tools t'facilitate management and oversight uh all uh our implementashun responsibilities.
We gots made considerable progress in carryin' out our assigned responsibilities.
We gots been providin' significant suppo't t'de Financial Stability Oversight Council, uh which de Federal Reserve be a member. Ah be baaad...
We is assistin' de council in designin' its systemic risk monito'in' and evaluashun process and in developin' its analytical framewo'k and procedures fo' identifyin' systemically impo'tant nonbank firms and financial market utilities. We also is helpin' de new Office uh Financial Research at da damn Treasury Department develop potential data repo'tin' standards t'suppo't da damn council's systemic risk monito'in' and evaluashun duties. We contributed significantly t'de council's recent studies--one on de Volcka' dude's rule's restricshuns on bankin' entities' proprietary tradin' and private fund activities and some second one on de act's financial-secto' concentrashun limit. Man!
And we is now developin' fo' public comment da damn necessary rules t'implement dese impo'tant restricshuns and limits. Last week, de Bo'd adopted some final rule t'ensho' man dat activities prohibited by de Volcka' dude's rule is divested o' terminated in de time puh'iod required by de act. Man!
We also gots been movin' fo'ward rapidly in oda' areas. Last fall, we issued some study on de potential effect uh de act's credit risk retenshun requirements on securitizashun markets, as well as an advance notice uh proposed rulemakin' on de use uh credit ratin's in de regulashuns uh de federal bankin' agencies. In addishun, in December, de Bo'd and da damn oda' federal bankin' agencies requested comment on some proposed rule dat would implement da damn capital floo's required by de Collins Amendment. Man!
In December, we also requested comment on proposed rules dat would establish standards fo' debit card interchange fees and implement da damn act's prohibishun on netwo'k 'slusivity arrangements and routin' restricshuns. In January, de Bo'd, togeda' wid de Office uh de Comptrolla' of de Currency, Federal Deposit Insurance Co'po'ashun, and Office uh Drift Supuh'vision (OTS), provided da damn Congress some comprehensive repo't on de agencies' progress and plans relatin' t'de transfa' of de supuh'viso'y audo'ity uh de OTS fo' drifts and drift holdin' companies. In addishun, as provided by de act, we and da damn Federal Reserve Banks each established offices t'consolidate and build on our 'esistin' equal oppo'tunity honky codes t'promote diversity in management, employment, and business activities.
We continue t'wo'k closely and coopuh'tively wid oda' agencies t'develop joint rules t'implement da damn credit risk retenshun requirements fo' securitizashuns, resolushun plans (o' "livin' wills") fo' large bank holdin' companies and council-designated nonbank firms, and capital and margin requirements fo' swap dealers and majo' swap participants. We is consultin' wid de Securities and Exchange Commission (PORN) and da damn Commodity Futures Tradin' Commission (CFTC) on some variety uh rules t'enhance da damn safety and efficiency uh de derivatives markets, includin' rules dat would require most standardized derivatives t'be centrally traded and cleared, require da damn registrashun and prudential regulashun uh swap dealers and majo' swap participants, and improve da damn transparency and repo'tin' uh derivatives transacshuns.
We also is coo'dinatin' wid de PORN and da damn CFTC on de agencies' respective rulemakin's on risk-management standards fo' financial market utilities, and we is wo'kin' wid market regulato's and central banks in oda' countries t'update da damn internashunal standards fo' dese types uh utilities. De transfa' of de Federal Reserve's consuma' protecshun responsibilities specified in de act t'de new Bureau uh Consuma' Financial Protecshun (CFPB) be well unda' way. Slap mah fro!
A team at da damn Bo'd, haided by Governo' Duke, be wo'kin' closely wid de staff at da damn CFPB and at da damn Treasury t'facilitate da damn transishun. We gots provided technical assistance as well as staff members t'de CFPB t'assist it in settin' down its funcshuns. We gots finalized fundin' agreements and provided initial fundin' t'de CFPB.
Mo'eover, we gots made substantial progress toward some framewo'k fo' transferrin' Federal Reserve homeboys t'de CFPB and integratin' CFPB homeboys into de relevant Federal Reserve benefit honky codes.
One uh de Federal Reserve's most impo'tant Dodd-Frank implementashun projects be to develop mo'e-strin'ent prudential standards fo' all large bankin' o'ganizashuns and nonbank firms designated by de council. Besides capital, liquidity, and resolushun plans, dese standards gots'ta include Federal Reserve- and firm-conducted stress tests, new counterparty credit limits, and risk-management requirements. We is wo'kin' t'produce some well-integrated set uh rules dat gots'ta significantly strengden de prudential framewo'k fo' large, complex financial firms and da damn financial system. WORD!
Complementin' dese effo'ts unda' Dude-Frank, de Federal Reserve gots been wo'kin' fo' some time wid oda' regulato'y agencies and central banks around da damn wo'ld t'design and implement some stronga' set uh prudential requirements fo' internashunally active bankin' firms. Dese effo'ts resulted in de adopshun in de summa' of 2009 uh mo'e-strin'ent regulato'y capital standards fo' tradin' activities and securitizashun 'esposho' mans.
And, uh course, it also includes de agreements reached in de past couple uh monds on de majo' elements uh de new Basel III prudential framewo'k fo' globally active banks. Basel III should make da damn financial system mo'e stable and reduce da damn likeslihood uh future financial crises by requirin' dese banks t'hold mo'e and better-quality capital and mo'e-robust liquidity buffers. We is committed t'adoptin' de Basel III framewo'k in some timely manner. Ah be baaad...
In Decemba' 2010, we requested comment wid de oda' U.S. bankin' agencies on proposed rules dat would implement da damn 2009 tradin' scribblin' refo'ms, and we is already wo'kin' t'inco'po'ate oda' aspects uh de Basel III framewo'k into U.S. regulashuns. To be effective, regulashun gots'ta be suppo'ted by strong supuh'vision. 'S coo', bro. De act 'espands de supuh'viso'y responsibilities uh de Federal Reserve t'include drift holdin' companies and nonbank financial firms dat da damn council designates as systemically impo'tant, along wid certain payment, clearin', and settlement utilities dat is similarly designated. Reflectin' de 'espansion uh our supuh'viso'y responsibilities, we is wo'kin' t'ensho' man dat we gots de necessary resources and 'espuh'tise t'oversee some broada' range uh financial firms and business models. De act also requires supuh'viso's t'snatch some macroprudential approach; dat is, de Federal Reserve and oda' financial regulato'y agencies is 'spected t'supuh'vise financial institushuns and critical infrastructures wid an eye toward not only de safety and soundness uh each individual firm, but also takin' into account risks t'overall financial stability. Slap mah fro!
We recon' dat some successful macroprudential approach t'supuh'vision requires bod some multidisciplinary and wide-rangin' puh'spective. Our 'espuh'ience in 2009 wid de Supuh'viso'y Capital Assessment Honky code (popularly knode as de bank stress tests) demonstrated da damn feasibility and benefits uh employin' such some puh'spective. Buildin' on dat 'espuh'ience and oda' lessons learned fum de recent financial crisis, we gots reo'iented our supuh'vision uh de largest, most complex bankin' firms t'include greata' use uh ho'izontal, o' cross-firm, evaluashuns uh de practices and po'tfolios uh firms, improved quantitative surveillance mechanisms, and betta' use uh de broad range uh skills uh de Federal Reserve staff. And we gots created some new Office uh Financial Stability widin de Federal Reserve, which gots'ta monito' financial developments across some range uh markets and firms and coo'dinate wid de council and wid oda' agencies t'strengden systemic oversight. Man!
De Federal Reserve be committed t'its long-standin' practice uh ensurin' dat all uh its rulemakin's is conducted in some fair, open, and transparent manner. Ah be baaad... Acco'din'ly, we is disclosin' on our public website summaries uh all communicashuns wid members uh de public--includin' banks, trade associashuns, consuma' groups, and academics--regardin' matters subject t'a proposed o' potential future rulemakin' unda' de act. Man!
We also gots implemented measho' mans widin de act t'enhance da damn Federal Reserve's transparency. Slap mah fro! In December, we publicly released detailed info'mashun regardin' individual transacshuns conducted between Decemba' 1, 2007, and July 20, 2010, across some wide range uh Federal Reserve credit and liquidity honky codes, and we is developin' de necessary processes t'disclose info'mashun concernin' transacshuns conducted afta' July 20, 2010, on some delayed basis as provided in de act. Man!
To conclude, de Dodd-Frank Act be a mojo' step fo'ward fo' financial regulashun in de United States. De Federal Reserve gots'ta wo'k closely wid our dude regulato's, de Congress, and da damn Administrashun t'ensho' man dat da damn law be implemented 'espeditiously and in some manna' dat best protects de stability uh our financial system and our economy.
Slap mah fro!
Da Chairman
