Systemic Risk -- My Testimony before the House Financial Services Committee

I testified before the House Financial Services Committee on Tuesday in a hearing on "Systemic Risk: Examining Regulators Ability to Respond to Threats to the Financial System". In my written testimony I provided my views on specific questions they had posed in their invitation.

One of the points I made in my testimony was the idea of the government taking on a role as a liquidity provider of last resort. This is something I addressed in my September 10th post, "Bailouts for Profit", and it was also a central point brought up in the testimony of another member of the panel, Professor Steven Schwarcz of Duke University. I had considered this a radical idea, but it was a dominant focus from the members of the committee during the two hours of questions.