September 23, 2008
STATEMENT FROM GOVERNOR DAVID A. PATERSON ON CREDIT DEFAULT MARKET
“Today, during his testimony to the Senate Banking Committee, SEC Chairman Christopher Cox joined my call for the federal government to regulate the approximately $60 trillion credit default market. Chairman Cox and I agree that this action is paramount if we are to stabilize this market.
“As I have said, the absence of regulatory oversight is the principle cause of the Wall Street meltdown we are currently witnessing. This is why New York took the crucial next step of planning to regulate an area of the market which had previously lacked appropriate oversight, but that is indisputably as regulatable as insurance. Additionally, the New York State Banking Department is working with the New York State Federal Reserve Bank to help create a central clearing facility for credit default swap’s that will help address counter party risk and establish margin requirements. I strongly encourage the federal government to follow our approach and bring stronger regulatory oversight to these markets. New York stands ready to work expeditiously with all concerned to find a workable solution to this problem.”
