MURKOWSKI COMMENTS ON FINANCIAL STABILIZATION EFFORTSI have heard from many Alaskans, and share their concern, regarding the Treasury’s proposal to stabilize financial markets by allowing banks and other financial institutions to ask the federal government to purchase distressed mortgages and mortgage-related securities. In general, I do not believe taxpayers should be called upon to rescue financial institutions that made risky business decisions that resulted in financial loss. The financial crisis that we face today, however, is unprecedented and has profound implications for the broader economy.
With confidence in our financial system shaken, the ability for people to get credit for larger purchases such as student loans, small business expansion or buying a car may be significantly constrained. This inability to get credit puts an almost unbearable strain on the economy. Uncertainty and the understandable fear of how we will resolve this issue is undermining confidence in our markets and choking off the credit needed to jumpstart our economy.
Congress recognizes the substantial need to instill confidence in the market place and to do so quickly. But quick action cannot preclude thoughtful legislative consideration. Congress has a fiduciary responsibility to the American taxpayer – we must rebuild the credibility of our financial institutions through strong oversight and accountability.
As Congress considers the Treasury’s proposal, I am particularly focused on provisions that would include additional congressional oversight, potential changes to bankruptcy laws as they apply to mortgages and very importantly, requiring program participants to curb executive compensation packages. I wholeheartedly believe that failure should not be rewarded, particularly with taxpayer dollars. At the end, I believe the greatest protection we can provide the American taxpayer is stabilization of our financial systems.