|FOR IMMEDIATE RELEASE:||CONTACT: CHRISTI HARLAN|
|Friday, July 23, 1999||202-224-0894|
Sen. Rod Grams, chairman of the Subcommittee on Securities, has announced that on Thursday, July 29, the subcommittee will hold a hearing on the accounting treatment for loan loss reserves held by banks and thrifts.
The hearing will focus on recent activities by the Securities and Exchange Commission and the Financial Accounting Standards Board with regard to the amount of reserves held by banks and thrifts to cover potential losses on loans.
"Over the past year, a disturbing series of events occurred related to accounting for loan loss reserves," Grams said. "The Securities and Exchange Commission, which is charged with protecting investors and ensuring that they have access to all material information concerning publicly traded securities, called into question how banks account for and reserve for loan losses.
"The SEC failed to coordinate its actions with the Federal banking regulators whose mission is to ensure the safety and soundness of these banks. This disconnect is simply unacceptable.
"After nearly a year, and three joint regulatory letters, there appears to be an agreement to work together to ensure that all federal agencies are using the same play book and that future actions will be coordinated.
"Because this issue will be addressed in the conference on financial services modernization, the subcommittee hearing will give SEC Chairman Arthur Levitt the opportunity to explain how this disconnect occurred, what his agency has done to resolve the problem, and what actions we can expect in the future. I am hopeful that this will put an end to the mixed signals being sent by the federal government and provide the clarity and coordination that taxpayers deserve."
Subcommittee on Securities
10:00 a.m. Thursday, July 29, 1999
538 Dirksen Senate Building
Honorable Arthur Levitt
Securities and Exchange Commission