Transcript, 67.

Still again:

As to this position, which I think is the central focus of the
hearing, as I've said, I think the issue of qualification is a
very relevant question. And, I think that the concerns raised
by your colleagues are legitimate questions. I am who I am..
.. Am I the absolute best candidate in the United States for
this job? I don't know. I don't know who else was in the
pool quite frankly. And, as I said before, I didn't select
myself for this.

Transcript, 171.

Even Committee members who ultimately voted to report favorably on

the nominee remarked on his lack of experience in the financial services field:

Senator Mack: As was mentioned, the rules have been

written, but that doesn't mean you don't have a lot of difficult
decisions you are going to have to make over the next few
short months. And what concerns me, frankly, is that under
this very difficult circumstance, you don't have the financial --
you don't have the background or the scope of knowledge, if
you will, to try to understand.what is, in fact, taking place in
the trenches of those financial institutions in the country.

Transcript, 32 (Opening Remarks of Senator Mack).

Senator Shelby: After looking into your background, some of
which I did not have yesterday -- and I did have a nice
conversation with you it appears to me that you would
certainly be a candidate for Secretary of Labor or something
like that based on your experience and background. However,
it is very troubling to me that you have hardly any, if not
inadequate experience, in dealing with financial institutions. .

Obviously, you have served well and are a quick learner.
But this is one of the biggest jobs in government and the fact
that you don't have the background, as far as I know, in that

area, bothers me tremendously. I will be interested in your comments later on as to whether you can show me you do.

Transcript, 34 (Opening Remarks of Senator Shelby).

Senator Garn: [You clearly and candidly admit you do not have the background or experience in this specific area.

Transcript, 70.

B. Failure to Comprehend Issues of Fundamental

Importance

When President Bush introduced FIRREA, he said we must assure the taxpayers that they will "never again" be called on to bail out the industry. Secretary Brady echoed that theme in presenting the

legislation to the Committee on February 22, 1989:

Two watch words guided us as we prepared a plan to solve
this problem--NEVER AGAIN.

Never again should a federal deposit insurance fund that protects depositors become insolvent.

Never again should insolvent federally-insured depository institutions remain open and operate without sufficient private risk capital.

Never again should risky activities permitted by individual states put the federal deposit insurance fund in jeopardy.

Never again should fraud committed against financial
institutions or depositors be punished as if it were a
victimless white-collar crime.

Never again should the nation's savings and loan system, which is important to our commitment to available, affordable housing, be put in jeopardy.

Problems of the Federal Savings and Loan Insurance Corporation: Hearings Before the Senate Committee on Banking, Housing and Urban Affairs on the Problems in the Savings and Loan Industry and the Potential Threat to the Insurance Fund Protecting S&L Deposits ("FSLIC Hearings"), Part II, 101st Cong., 1st Sess. 27 (emphasis in original).

We commend these five policy goals, and believe that ability to articulate positions and policy arguments related to these goals forms an appropriate yardstick by which to measure nominees to the position of Director of the OTS. When measured by this yardstick, however, Mr. Ryan falls short on every count but one. Only with respect to his commitment to pursue the perpetrators of thrift fraud do we believe Mr. Ryan has demonstrated the comprehension and vision we believe a nominee should have. With respect to the remaining four goals, we have grave concerns.

1. "Never again should a federal deposit insurance fund that protects depositors become insolvent"

In testifying before the Committee, Mr. Ryan showed little grasp of the significance of deposit insurance or its role in current policy debates over financial modernization:

Senator Cranston: What are your thoughts on deposit
insurance reform? Do you think any is needed?

Mr. Ryan: I know that the Treasury is right now in the

process of collecting comments from various interest groups as

to what should happen with the depository insurance system. And, I would await some judgments and review of those documents, Senator Cranston. I have no specific view as to should there be modifications. My only view is that we are looking at ultimately taxpayer funds. And, I think the principal issue involved in this job, that is Director of the OTS, has to do with preserving taxpayer funds.

Transcript, 155 (emphasis added).

We think a sound deposit insurance system is key to the future of the financial services industry. The system's integrity is critical to protecting the taxpayers from future bailouts. In addition, deposit insurance reform is a central issue in current debates over modernizing America's system of financial services regulation to improve its

competitiveness at home and abroad.

2. "Never again should insolvent federally-insured depository institutions remain open and operate without sufficient private risk capital"

Committee members questioned Mr. Ryan about his views on

capital standards at several points in the hearing:

Senator Wirth: The issue I am probing after is what is your belief, and how adequate the capital standards are, and are the capital standards adequate the way they are? Should they be stronger or weaker? Are there exceptions that ought to be made by OTS? It was my understanding that you had commented that OTS did have the authority to set a lower capital standard on behalf of your previous clients, suggesting that you might believe that lower capital standards are appropriate. Do you see what I am getting at?

Mr Ryan: I see exactly where you are going.

Senator Wirth: Clear me up. Is that correct or incorrect?

Mr. Ryan: We certainly took a position on behalf of a client and expressed their views, and they would like to see parity between those instruments.

Senator Wirth. Which would mean lower capital standards if you had insurance, is that right?

Mr. Ryan: It would have the impact of making it the same.

Senator Wirth: Is that what you are trying to tell us?

Mr. Ryan: So, if that would be lower, then yes, you are
correct, Senator.

Transcript, 90-91.

Again:

Mr. Ryan: My view on the capital guidelines is that the
Congress made the decision as to what those standards should
be, and the President signed the bill, and they are in place.
There are tangible capital standards, there are core capital
standards, and there are risk-based capital standards. Once
the good will is phased out, we will be down, I guess, to
really two capital standards.

1

Senator Wirth: Should there be any weakening of thrift
capital standards?

Mr. Ryan: I probably do not have a view on that subject right now. My sense is that the system that is set up, although it appears to many to be very tough, appears to be reasonable.

Senator Wirth: So, we don't have an answer if you think the capital standards should be weakened or not? You don't have an opinion on that? I mean, this is one of the crucial issues Senator D'Amato was talking about earlier, certainly one of the crucial issues that we were all focused on, particularly in