June 17, 2011
Republicans in both the House and Senate last Thursday voiced their worries regarding both the impact and current execution of Dodd-Frank financial regulations.
“Republican members of the House Financial Services Committee aired their worries on Thursday that the Dodd-Frank Act will hamper U.S. competitiveness and drive capital and jobs overseas,” reports AdvisorOne. “At the same time, 10 GOP members on the Senate Banking Committee voiced their concerns the same day about reports from inspectors general reports that found the nation’s top regulators aren’t performing an adequate cost-benefit analysis on Dodd-Frank rulemakings.”
The site reports leading U.S. regulators testified at the House Financial Services Committee hearing “Financial Regulatory Reform: The International Context,” addressing their work with international regulators and ideas on how to hold banks to higher capital and liquidity standards under Basel III.
“Some would argue that the United States is moving too fast… that we should wait to see what other countries implement” testified Lael Brainard, undersecretary for international affairs at the Treasury Department, regarding implementation of Dodd-Frank reforms. “I would argue that by moving first and leading from a position of strength, we are elevating the world’s standards to ours. By leading, we are investing in the future strength and resilience of the global financial system so that it yields results for the next generation of Americans.”
Steve Garrett (R-NJ), meanwhile, stated his belief that Dodd-Frank’s “overreaching policies” will transfer capital and jobs overseas.
“Some substantial differences are beginning to emerge between Dodd-Frank’s financial reforms and those of the rest of the world,” Garrett said, chairman of the House Subcommittee on Capital Markets. “Instead of ‘you lead on reform and we will follow’; it’s now ‘you lead and we will pick and choose how we want to follow… Now risks capital and jobs going overseas and severely impairing the global competitiveness of U.S. financial markets. The overreaching policies codified in Dodd-Frank have incentivized other countries to increase their taxable revenue through strategic regulatory arbitrage.”
Meanwhile, the Senate responded to IG reports released June 13 for the Commodity Futures Trading Commission (CFTC), the Federal Deposit Insurance Corp. (FDIC), the Federal Reserve Board, the Office of the Comptroller of the Currency (OCC) and the SEC.
“The regulatory agencies charged with implementing Dodd-Frank are not undertaking the type of economic analysis that is necessary to reveal how Dodd-Frank will affect our economy,” said Sen. Richard Shelby (R-AL), the ranking committee member. “We must continue to monitor and improve the amount and type of analysis that the financial regulators are conducting in implementing this far-reaching law.”
Shelby added that the Republican Banking Committee staff will soon begin in-depth briefings with each of the inspectors general to discuss the report results and future action stemming from the findings.
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