On November 21, Cornell Law School Professors Robert Hockett and Saule Omarova simultaneously testified before two separate Senate committees investigating concerns that have recently emerged in connection with the financial services industry.
Professor Hockett testified before Senators Sherrod Brown, Joe Manchin, Jeff Merkley, Jack Reed, and Elizabeth Warren of the Senate Committee on Banking, Housing, and Urban Affairs. The committee is investigating recent allegations of laxity on the part of the Federal Reserve Bank of New York in regulating the large financial institutions operating within its jurisdiction. Hockett, who has worked in a consultative capacity with the New York Fed in recent years, testified that while there is no evidence of "regulatory capture" of the institution as a whole, there have been enough concerns raised about deference on the part of Fed bank examiners as to warrant measures aimed at strengthening regulatory independence.
Professor Omarova testified before Senators Carl Levin and John McCain of the Senate Committee on Investigations. The committee has been investigating the recent expansion of large financial holding companies into the physical commodities markets-a concern brought to public attention by Omarova's scholarship. Omarova highlighted the ways in which this expansion undermines the traditional American regulatory principle pursuant to which banking is kept separate from non-banking commercial activity. She also showed that attempts by lobbyists to legitimize these new forms of conglomeration all ignore American banking law and history.
This was almost certainly the first time that more than one Cornell law professor testified before Congress on multiple matters during a single day. Professors Hockett and Omarova, who collaborate frequently on projects of joint concern, compared notes on their sessions later in the day and began planning their next co-authored article together.
Click here to view Hockett's testimony. (Testimony begins at 2-hour mark)