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562 Notes to Chapter 4

6. John D. Hawke and John Dugan, testimony before the FCIC, Hearing on Subprime Lending and
Securitization and Government-Sponsored Enterprises (GSEs), day 2, session 2: Office of the Comptrol-
ler of the Currency, April 8, 2010, transcript, pp. 169, 175.
7. Fed Vice Chairman Roger W. Ferguson Jr., “The Future of Financial Services—Revisited,” remarks
at the Future of Financial Services Conference, University of Massachusetts, Boston, October 8, 2003.
8. Fed Chairman Alan Greenspan, “Government Regulation and Derivative Contracts,” speech at the
Financial Markets Conference of the Federal Reserve Bank of Atlanta, Coral Gables, Florida, February
21, 1997.
9. Richard Spillenkothen, “Notes on the performance of prudential supervision in the years preceding
the financial crisis by a former director of banking supervision and regulation at the Federal Reserve
Board (1991 to 2006),” May 31, 2010, p. 28.
10. See U.S. Department of the Treasury, Modernizing the Financial System (February 1991), pp. XIX-
5, XIX-6, 67–69: “the existence of fewer agencies would concentrate regulatory power in the remaining
ones, raising the danger of arbitrary or inflexible behavior. . . . Agency pluralism, on the other hand, may
be useful, since it can bring to bear on general bank supervision the different perspectives and experi-
ences of each regulator, and it subjects each one, where consultation and coordination are required, to the
checks and balances of the others’ opinion.”
11. Fed Chairman Alan Greenspan, statement before the Senate Committee on Banking, Housing,
and Urban Affairs, 103rd Cong., 2nd sess., March 2, 1994, reprinted in the Federal Reserve Bulletin, May
1, 1994, p. 382.
12. Securities Industry Association v. Board of Governors of the Federal Reserve System, 627 F.Supp.
695 (D.D.C. 1986); Kathleen Day, “Reinventing the Bank; With Depression-Era Law about to Be Rewrit-
ten, the Future Remains Unclear,” Washington Post, October 31, 1999.
13. Edward Yingling, quoted in “The Making of a Law,” ABA Banking Journal, December 1999.
14. The two-year exemption is contained in section 4(a)(2) of the Bank Holding Company Act. The
Fed could have granted up to three one-year extensions of that exemption.
15. FCIC staff computations based on data from the Center for Responsive Politics. “Financial sector”
here includes insurance companies, commercial banks, securities and investment firms, finance and
credit companies, accountants, savings and loan institutions, credit unions, and mortgage bankers and
brokers.
16. U.S. Department of the Treasury, Modernizing the Financial System (February 1991); Fed Chair-
man Alan Greenspan, “H.R. 10, the Financial Services Competitiveness Act of 1997,” testimony before
the House Committee on Banking and Financial Services, 105th Cong., 1st sess., May 22, 1997.
17. Katrina Brooker, “Citi’s Creator, Alone with His Regrets,” New York Times, January 2, 2010.
18. John Reed, interview by FCIC, March 24, 2010.
19. FDIC Institution Directory; SNL Financial.
20. Fed Governor Laurence H. Meyer, “The Implications of Financial Modernization Legislation for
Bank Supervision,” remarks at the Symposium on Financial Modernization Legislation, sponsored by
Women in Housing and Finance, Washington, D.C., December 15, 1999.
21. Ben S. Bernanke, written testimony before the FCIC, Hearing on Too Big to Fail: Expectations and
Impact of Extraordinary Government Intervention and the Role of Systemic Risk in the Financial Crisis,
day 1, session 1: The Federal Reserve, September 2, 2010, p. 14.
22. Patricia A. McCoy et al., “Systemic Risk through Securitization: The Result of Deregulation and
Regulatory Failure,” Connecticut Law Review 41 (2009): 1345–47, 1353–55.
23. Fed Chairman Alan Greenspan, “Lessons from the Global Crises,” remarks before the World Bank
Group and the International Monetary Fund, Program of Seminars, Washington, DC, September 27,
1999.
24. David A. Marshall, “The Crisis of 1998 and the Role of the Central Bank,” Federal Reserve Bank of
Chicago, Economic Perspectives (1Q 2001): 2.
25. Commercial and industrial loans at all commercial banks, monthly, seasonally adjusted, from the
Federal Reserve Board of Governors H.8 release; FCIC staff calculation of average change in loans out-
standing over any two consecutive months in 1997 and 1998.
26. Franklin R. Edwards, “Hedge Funds and the Collapse of Long-Term Capital Management,” Jour-
nal of Economic Perspectives 13 (1999): 198.