First of all, I want to commend Senator Johnson for holding this hearing. This is a very timely issue now, particularly with the House Financial Services Committee already holding several hearings on the subject. I am pleased that the Senate Banking Committee, within the appropriate subcommittee, now has an opportunity to discuss the issue from our own perspective. I also understand from Senator Johnson that he intends to hold several hearings on this topic once Congress has returned from the August recess.
Second, I want to thank all of the witnesses who are appearing before us this morning. I know that this is an important issue to all of you, and for those that you represent, so we are appreciative of your time and work in this effort, in order to better explain your positions to us at this time.
Third, I want to just briefly speak of my feelings toward deposit insurance reform, and the importance I believe it holds in the context of this Committee's attention, and possible future action.
The FDIC's Options paper that it produced in April provides much sound advice on how Congress should proceed with reforming our deposit insurance system. Most importantly I think, it needs to be done sooner rather than later, and I certainly commend former FDIC Chairwoman Donna Tanoue for having the foresight to work on this issue and produce such a worthy product for discussion.
It has been said many times before by others, including the distinguished chairman of the subcommittee, that the current system is pro-cyclical and will harm the banks it seeks to assist by charging higher premiums during more difficult economic times. Therefore, it seems to behoove us to work together to enact a system that will have the opposite effect. In other words, we should change the system now during strong and healthy economic times, by potentially charging minimal premiums to institutions, based on their risk of course, and lessening the burden in the leaner years.
Obviously, there are many complicated issues inherent in taking on a matter as complex as our deposit insurance system, and there are many different sides to the issue as well. That is why I am pleased that we are able to hear today from the major banking trade associations, and that we will hear from other interested parties in the weeks to come. I also look forward to working with Senator Johnson and others on the committee on deposit insurance reform legislation in the near future. We have a long road and task ahead of us, but I am confident that we will produce thoughtful and comprehensive legislation at the end of the day.
Thank you Mr. Chairman.