Today, I called for swift and strong action to stem the growing credit crisis on Wall Street. I offered a series of bold, specific proposals, including creating a new version of the Home Owners' Loan Corporation (HOLC) to restore confidence in the market, curbing the most damaging and manipulative trading practices, providing relief to homeowners facing foreclosure, and reasserting competent federal oversight.
I am deeply concerned about the effects of the market crisis on New Yorkers, including the many homeowners fighting foreclosure and the tens of thousands whose livelihoods depend on Wall Street. In response, I outlined a series of proposals to address the crisis:
* Create a new entity to buy up and quarantine toxic mortgage securities that are dragging down the markets which would allow the markets to stabilize. Last spring, I was among the first to call for a new entity modeled after the successful Depression-era Home Owners' Loan Corporation (HOLC) or the Resolution Trust Corporation (RTC) created after the Savings and Loan crisis.
* Place a temporary moratorium on the most abusive stock transactions, many of which involve the "short-selling" of stocks. Yesterday, I wrote to the Securities and Exchange Commission urging such a moratorium, saying it would provide breathing room for the markets to recover, for investors to make accurate assessments of companies and for regulators to assess what trading practices should be permanently banned.
* Convene an emergency economic summit to show the American people their government is working together. Bringing together leaders in the administration and Congress with lenders, consumer advocates, non profits, financial institutions, and all stakeholders will allow a coordinated response to the crisis.
* Aggressively pursue and encourage mortgage modifications. I have introduced legislation to remove barriers to mortgage modification and to encourage lenders to voluntarily work with borrowers to keep them current on payments and in their homes.
* Restore competent federal oversight of the increasingly complicated financial markets. The rapid evolution of the securities and banking industry overwhelmed the current regulatory framework, resulting in a "shadow banking system" that operates outside of oversight and without accountability.
* Require transparency and accountability on executive pay. I have proposed the Corporate Executive Compensation Accountability and Transparency Act to impose new transparency rules on executive pay, end the accounting techniques that hide compensation, and provide shareholders a say in executive compensation packages.
* Ensure the accountability of financial institutions borrowing money from the Federal Reserve's new lending facilities. Taxpayers deserve to know that the companies they are bailing out are on the road to recovery and are not throwing more good money after bad.