Opening Statement of
Rep. Paul E. Kanjorski
House Committee on Banking & Financial Services
Hearing on the International Financial Turmoil
September 16, 1998
Thank you, Mr. Chairman, for allowing Members of Congress to examine the important issues at stake in the current financial turmoil spreading throughout world markets.
It has become increasingly evident that the global financial system is under serious attack. Traditional methods of staving off crises have proved inadequate, and institutions like the International Monetary Fund (IMF) have failed to precipitate a quick rebound in emerging markets. According to most experts, this downturn now threatens the unprecedented prosperity of the United States itself.
In these trying times, it is up to the United States to make every possible effort to turn around the global economic situation. It is in our economic self-interest to attempt to avert the worst effects of this crisis. After all, just as some people say a rising tide lifts all boats, so too it can sink all ships. We must also realize that many tools will be needed to repair the international financial fabric. In addition to strengthening existing institutions, we need to consider other steps that will contain this global contagion. I am eager to hear from our panelists about what initiatives the Administration and the Federal Reserve contemplate.
While the IMF has failed to prevent the current crisis, this serves as a warning to us that we need to become more involved on the international stage. How can we expect an under-funded IMF to effectively deal with this crisis without the support of the legislative body of its largest contributor? We have no choice but to strengthen international institutions, or we will be left to deal with the fall-out alone, and at greater cost to U.S. taxpayers.
In conclusion, let me say that I hope my colleagues on this committee and in the Congress join me in reaffirming our commitment to international engagement. I think the lessons of history teach us that we have no other viable option. It is hard to imagine any effective solution to the current crisis without strong U.S. support.
Mr. Chairman, these are important issues for this Congress to address. I look forward to the testimony of this august panel of witnesses.