Senate Banking Committee Hearing: "Wall Street Reform - Oversight of Financial Stability and Consumer and Investor Protections" (with Video and Highlights)

The Committee on Banking, Housing and Urban Affairs conducted a hearing on "Wall Street Reform: Oversight of Financial Stability and Consumer and Investor Protections." The witnesses included: The Honorable Mary J. Miller, Daniel K. Tarullo, Martin J. Greunberg, Thomas J. Curry, Richard Cordray, Elisse B. Walter and Gary Gensler. Here were some of the main topics of coverage:

• State of Dodd-Frank Rulemaking: CFTC Chairman Gensler asserted that the CFTC has completed 80% of its rules. Mary Miller, Under Secretary for Domestic Finance U.S. Department of the Treasury, testified: "Efforts to repeal the Dodd-Frank Act in whole or piecemeal or to starve regulators by underfunding them will hamper growth, allow uncertainty to fester, and be corrosive to the strength and stability of our financial system. The progress we have made so far is because of the reforms that we are putting in place, not in spite of them. Completion of these reforms provides the best path to building a sounder foundation for continued economic growth and prosperity."
• Futurization of Swaps: Chairman Gensler characterized what is going on as a "relabeling, reshifting" that is "natural." The "good news," according to Gensler, is that whether something is called a swap or future, there will be more transparency.
• Cost/Benefit Analysis: Chairman Walter offered that the SEC intends to engage in "robust economic analysis" with respect to its Dodd-Frank rules. Chairman Gensler only discussed the issue in response to questioning from Senator Crapo. Senator Crapo brought up a GAO report which found that independent agencies were not engaging in economic analysis in accordance with OMB guidance. Gensler mentioned that the CFTC's Office of General Counsel and Office of Chief Economist had issued guidance, and that "we have our own standard under CEA Section 15." Crapo responded by saying, "I don't believe that your statute prevents you from doing economic analysis in accordance with the GAO report." He also said that the GAO report was explicit in stating the economic analysis was not happening, and that it was "pretty damning." Crapo asked the panelists to commit to engaging in such analysis in accordance with the recommendations of GAO, but no one volunteered. He asked each agency to provide a description of its approach to fulfilling this requirement.

See: Video of Hearing.
Related News Items: FRB, OCC, FDIC, CFPB and Treasury Testify before the Senate Banking Committee; SEC Chairman Walter Delivers Speech before the Senate Banking Committee; and CFTC Chairman Gary Gensler Delivers Speech Before the Senate Banking Committee.