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[0] HEARING OF THE CAPITAL MARKETS, INSURANCE AND GOVERNMENT SPONSORED ENTERPRISES SUBCOMMITTEE OF THE HOUSE FINANCIAL SERVICES COMMITTEE SUBJECT: SEC OVERSIGHT: CURRENT STATE AND AGENDA CHAIRED BY: REPRESENTATIVE PAUL KANJORSKI (D-PA) WITNESS: MARY SCHAPIRO, CHAIRMAN, U.S. SECURITIES AND EXCHANGE COMMISSION LOCATION: 2128 RAYBURN HOUSE OFFICE BUILDING TIME: 10:00 A.M. EDT DATE: TUESDAY, JULY 14, 2009 (Part 15).

Article Excerpt
REP. SPENCER BACHUS (R-AL): Thank you, Mr. Chairman.

Recently FASB announced some changes in the securitization accounting rules. The Federal Reserve and other bank regulators have cautioned that the rule changes threaten the viability of the federal government's economic recovery plan because that plan is partially dependent on restarting the securitization markets. And there has been some comment and concern that the accounting changes would actually throw into question the securitization model that we've been using in the past.

Are you concerned about the timing and the scope of their accounting rule changes, particularly given the emphasis that the government and, I think, private economists have in restarting the securitization market?

MS. SCHAPIRO: Well, I should say, as a prelude to that, that the SEC is very interested in doing what we can to help assure a vibrant asset-backed securities market. And we have made a number of proposals that would require legislation that would allow for more continuous disclosure, so forth, for asset-backed securities.

I think what FASB has done with respect to off-balance sheet is really very important. There's been a conclusion, or at least a view, widely expressed, frankly, by governments around the world that off- balance sheet accounting is a contributor to the financial crisis. And so FASB and other accounting standard-setters have worked very hard to...

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