[Congressional Record (Bound Edition), Volume 159 (2013), Part 3]
[Extensions of Remarks]
[Page 4503]
[From the U.S. Government Publishing Office, www.gpo.gov]




         INTRODUCTION OF THE FINANCIAL COMPETITIVE ACT OF 2013

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                        HON. STEPHEN LEE FINCHER

                              of tennessee

                    in the house of representatives

                        Thursday, March 21, 2013

  Mr. FINCHER. Mr. Speaker, I rise today to discuss my bill, the 
Financial Competitive Act of 2013. My legislation simply requires the 
Financial Stability Oversight Committee to conduct a study of the 
impact of implementation of the Credit Valuation Adjustment (CVA) 
capital requirement on U.S. consumers, end users, and U.S. financial 
institutions.
  European Basel III rules are being finalized and would provide a 
significant exemption from CVA market risk Risk-Weighted Assets (RWA) 
for EU banks.
  EU banks would be exempt from CVA RWA requirements for transactions 
with sovereign pension funds and corporate counterparties, which are 
also exempt from clearing obligations. It is interesting to note that 
the EU did there due diligence and determined the risk factors merited 
an exemption.
  My legislation is simply asking for due diligence in determining if 
U.S. financial institutions will be competitively disadvantaged. To me, 
this exemption will provide a significant advantage to European banks, 
European customers, and European end users.
  Mr. Speaker, the U.S. economy is in a fragile state, any hurdle, fee, 
or foreign advantage, will cost the U.S. economy valuable jobs. This 
decision by the European regulators disregards the Basel III 
international agreement and will have lasting consequences for U.S. and 
international markets. U.S. financial institutions will be 
competitively disadvantaged that will affect how these institutions 
serve consumers in the derivative business as well as the commercial 
loan business.
  Further, end-users will see a significant impact through limited 
competition which affects pricing and services.
  My legislation will clarify the impact Basel III CVA RWA exemption 
for EU financial institutions will have on the U.S. economy. We can't 
afford to wait while Europe takes valuable market share away from U.S. 
companies.
  Mr. Speaker, I urge my colleagues in the House (and Senate) to 
support me in passing the Financial Competitive Act of 2013 in order to 
ensure the law of unintended consequences doesn't place and U.S. 
consumers, end users, and financial institutions are not put at a 
disadvantage.

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