Mr. Chairman:
As you may know, the Finance Committee, of which I am a new member, is marking up a key legislative priority for the Administration at the same time as this confirmation hearing for Mr. Donaldson. In addition, I am the lead Republican sponsor of the legislation, the Charity Aid, Recovery, and Empowerment (CARE) Act. I regret that I will have to leave shortly, but I would like to submit a written statement.
Mr. Donaldson, you are being considered to take leadership responsibility at a challenging time for the Securities and Exchange Commission, investors and Wall Street. The drop of the stock market and various financial scandals, some of which involve criminal wrongdoing, have taken their toll on the U.S. financial sector, investor confidence, and the economy at large. In response to the scandals, Congress last year passed the Sarbanes-Oxley Act, the most sweeping securities legislation in a generation.
Yet at the same time, it is important to remember that the U.S. financial markets are the most fair and efficient in the world and play a key role in the economic strength of our nation and the standard of living Americans enjoy. The preeminence of U.S. financial markets, however, is not automatic and there are competitors around the world who would eagerly replace the position of the United States in world financial markets.
Innovation, competition, and the trustworthiness of our processes and our people have produced all the positive characteristics found in our financial markets today. Yet events of recent years prove that there are still standards to tighten, and unfortunately, crooks to punish. The Commission must therefore regulate with the utmost care while balancing competing needs to provide for necessary safeguards, particularly for average investors, as well as maintaining our competitiveness. If done well, the safeguards of a sensibly regulated national market system can be an asset to U.S. financial markets that will allow Americans to continue to benefit from favorable capital inflows from around the world to U.S. markets.
Your experience in various roles in the financial world will bring an important perspective as you lead the Commission in the coming years in evaluating complicated issues and making significant decisions for which there will be no absence of critics or scrutiny. I look forward to working with you as this Committee continues its work to ensure that the SEC has the necessary resources and legislative authority from Congress to perform its mission with excellence and to reinvigorate confidence on the part of all investors in U.S. financial markets.