2:22 PM EDT
Ed Royce, R-CA 40th

Mr. ROYCE. Now, what we do with this legislation is we make the largest institutions too big to fail, and we do so by putting in a provision that is going to allow them to borrow at a lower cost than their smaller competitors, who I guess we would say are too small to save. Right. They are going to borrow at a hundred basis points less because of the government backstop you're putting in place and because you're not allowing them to go through a regular bankruptcy process. We would like to see

enhanced bankruptcy on the Republican side. We'd like to see firms actually fail.

Instead, we're going to have a process here where creditors are going to get a hundred cents on the dollar, potentially. They are going to loan to big firms; these big firms are going to become overleveraged. You did the same thing here that you did with the government-sponsored enterprises, Fannie and Freddie, that then forced their competition out of the market. And as a consequence of that, they became duopolies and then failed.

So this is what we're trying to get across to our friends on the other side of the aisle. This is why we oppose your approach. We've seen where it's headed from before.