Deputy Treasury Secretary Neal Wolin said Monday that Treasury is moving as “quickly and carefully” as it can to implement the Dodd-Frank Act, and cited several “broad principles” that are guiding Treasury’s efforts in this area. Wolin made his comments at a conference held at Georgetown University in Washington that was entitled, “Financial Reform, What’s Next?: A U.S. and Global Perspective Examining the Opportunities and Challenges Ahead.” The event was co-sponsored by PricewaterhouseCoopers and Georgetown University’s McDonough School of Business.
While Dodd-Frank addresses the “core problems that led to [the financial] crisis,” Wolin said, “enacting this law is just the beginning,” and the hard work has now begun with the implementation of Dodd-Frank.
Wolin listed seven broad principles guiding Treasury’s efforts to implement Dodd-Frank.
- First, wherever possible, he said, “We are quickly providing clarity to the public and the markets. But the task we face cannot be achieved overnight.” Wolin said Treasury must write new rules “in some of the most complex areas of finance; consolidate authority spread across multiple agencies; set up new institutions for consumer protection and for addressing systemic risks; and negotiate with countries around the world.” In getting this done, he continued, “we are making sure to get it right.”
- Second, Treasury is conducting the implementation process “out in the open, bringing full transparency to implementation activities,” Wolin said. “As we write new rules, we will consult with a broad range of groups and individuals. And as we seek their input, the American people will be able to see who is at the table. Draft rules will be published. Everyone will be able to comment.”
- Third, wherever possible, we will streamline and simplify government regulation.
- Fourth, Wolin continued, “we will create a more coordinated regulatory process.” Ahead of this crisis, he said, “gaps and inconsistencies between regulators proved to be a major failure. Gaps allowed risks to grow unattended and inconsistencies allowed an overall race to the bottom. Better coordination will help prevent a recurrence.”
- Fifth, “we will create a level playing field,” he said. “A level playing field must exist not just between banks and non-banks here in the United States, but also between major financial institutions globally.”
- The sixth principle is protecting “the freedom for innovation that is absolutely necessary for growth,” Wolin said. “Our system allowed too much room for abuse and excessive risk. But as we put in place rules to correct for those mistakes, we have to achieve a careful balance and safeguard the freedom for competition and innovation that are essential for growth.”
- And seventh, Wolin said Treasury is “keeping Congress fully informed of our progress on a regular basis.”
Wolin also made note of three of the agencies “at the heart” of Dodd-Frank–the Financial Stability Oversight Council, the Office of Financial Research, and the Consumer Financial Protection Bureau (CFPB).