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. 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.
During the House Financial Services Committee hearing titled, “Financial Regulatory Reform: The International Context,” the nation’s top regulators testified on their efforts to collaborate with international regulators as well as the plans to hold banks to higher capital and liquidity standards under Basel III.
Lael Brainard, undersecretary for international affairs at the Treasury Department, said during her testimony that while “some would argue that the United States is moving too fast” on financial regulatory reform under Dodd-Frank, and “that we should wait to see what other countries implement,” she disagrees. “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.”
Securities and Exchange Commission (SEC) Chairman Mary Schapiro focused her testimony on the importance of international coordination in oversight of the over-the-counter derivatives (OTC) market—which she said now has a global notional value of $600 trillion. Title VII of the Dodd-Frank Act would bring this OTC market “under the regulatory umbrella,” she said.
GOP members of the House Financial Services Committee such as Rep. Steve Garrett (left), R-N.J., chairman of the House Subcommittee on Capital Markets, expressed their concerns that Dodd-Frank’s “overreaching policies” will send 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. “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.’”