This week, during a House Financial Services Committee hearing, Congressman Blaine Luetkemeyer (MO-3) questioned prudential regulators on the U.S. financial system’s preparedness for China’s seemingly inevitable invasion of Taiwan.

Watch the video HERE.

Rep. Luetkemeyer: “I met with a market expert about the likely scenario that China will invade Taiwan by 2027 and the U.S. sanctions that will immediately follow. His analysis shows that our market will immediately drop 50% to 80%. I understand none of you are directly responsible for U.S. sanctions policy, but the effects of those sanctions will impact the institutions you regulate. Mr. Hsu, how often do you meet with Secretary Yellen, the Department of Defense, intelligence officials, and leaders of industry to develop a plan to mitigate the fallout of this apparent inevitability?”

Michael Hsu, Acting Comptroller of the Currency: “There are regular conversations at different levels to deal with, um, to assess risks in the banking system. And those span a range of topics. Sometimes it’s discussions on cybersecurity, that’s often the focus of those interactions, but they also span some of the issues you’re talking about.”

Rep. Luetkemeyer: “Mr. Harper, are you involved in those discussions at all?”

Todd Harper, NCUA Chair: “No.”

Rep. Luetkemeyer: “Mr. Gruenberg, are you concerned about it at all? Have you talked about it?”

Martin Gruenberg, FDIC Chair: “You raise a critical issue, Congressman. There are contingency plans, but for me to respond I’d like to come back to you later.”

Rep. Luetkemeyer: “As you all know, the interest rate problem you worked on in March is going to be teeny tiny compared to what this would be. We need to be thinking about this with regard to how we can address this for the protection of our whole system.”

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