FEDERALhearing transcript

Hearing on Risks in Leveraged Lending

Original title: EMERGING THREATS TO STABILITY: CONSIDERING THE SYSTEMIC RISK OF LEVERAGED LENDING

January 1, 2020

financial regulation leveraged lending systemic risk economic stability FSOC Office of Financial Research

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The Frame

What this does

This hearing examines how federal regulators monitor high-risk corporate debt, which could impact the stability of the broader financial system and the availability of credit for businesses and consumers.

Who is mentioned in the record

Potentially affected actors named in the source documents. Mention is not a position.

Financial institutions

These entities are subject to potential new regulatory oversight or reporting requirements regarding their lending practices.

Corporate borrowers

Changes in lending regulations may impact the cost or availability of credit for companies seeking leveraged loans.

What changed

Last recorded activity January 1, 2020.

What's next

Next step not available in the current record.

Summary

The House Subcommittee on Consumer Protection and Financial Institutions held a hearing on June 4, 2019, to examine the s posed by . The session focused on the roles of the Financial Stability Oversight Council () and the Office of Financial Research in monitoring and managing these financial threats.

Key Facts

The hearing took place on June 4, 2019, in the Rayburn House Office Building.
The hearing focused on the systemic risk of leveraged lending.
The subcommittee discussed the oversight roles of the Financial Stability Oversight Council (FSOC) and the Office of Financial Research.
Four expert witnesses provided testimony: Erik F. Gerding, Victoria Ivashina, Gregory Nini, and Gaurav Vasisht.
Bartlett Collins Naylor of Public Citizen submitted a written statement for the record.

Frequently Asked Questions

What is leveraged lending?

refers to loans extended to companies that already have significant amounts of debt or poor credit histories, often used for buyouts or mergers.

Why is the government concerned about leveraged lending?

Regulators are concerned that if many of these high-risk loans default simultaneously, it could create that threatens the stability of the entire financial system.

Why It Matters

News Coverage

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Discoveries

Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.

policy shift90% confidence

Focus on FSOC Oversight

The hearing highlights a specific legislative interest in strengthening the role of the FSOC and the Office of Financial Research in mapping systemic risks.

Financial Stability Oversight Council Office of Financial Research

Connected Entities

organizationFinancial Stability Oversight Council“Federal body responsible for monitoring systemic risk”Map →

personGaurav Vasisht“Witness, Senior Vice President at The Volcker Alliance”Map →

personVictoria Ivashina“Witness, Professor of Finance at Harvard Business School”Map →

organizationOffice of Financial Research“Federal office providing data and analysis to the FSOC”Map →

personGregory W. Meeks“Chairman of the Subcommittee on Consumer Protection and Financial Institutions”Map →

personBlaine Luetkemeyer“Ranking Member of the Subcommittee”Map →

personErik F. Gerding“Witness, Professor of Law at University of Colorado”Map →

personGregory Nini“Witness, Professor of Finance at Drexel University”Map →

Sources

Open source document

www.govinfo.gov

Analysis Score

0–100

Significance65
How much this matters to a regular citizen
Controversy20
Intensity of disagreement among stakeholders
Entertainment5
Compellingness for a non-policy-wonk reader
Buzz10
Current news / social attention level

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