SEC Commissioner Gallagher Discusses Competition in the Global Capital Markets

SEC Commissioner Gallagher discussed the current global and domestic state of capital markets and the ways in which the U.S. can maintain competitive capital markets.

According to Commissioner Gallagher, the United States is at risk of losing its status as the world's capital markets leader. Too often, he explained, legislators and regulators are "laying on regulation after regulation" instead of thinking creatively about ways to promote capital formation. He stated that it is imperative for policymakers to question the "over regulation" that the U.S. inherited from the financial crisis and "to dust off the good work that was done pre-crisis" to maintain a robust and competitive global capital market.

According to Commissioner Gallagher, this overregulation has led to an increase in the cost of doing business, primarily from the cost of complying with new regulations placed on U.S. companies. He noted that the SEC has allocated significant resources to "politically motivated mandates that do nothing for investors except decrease their returns."

Commissioner Gallagher explained that the government should "catch and eliminate every bad risk, while not eliminating good risk taking." He cautioned banking regulators against extending their reach into capital markets.

Commissioner Gallagher also pointed out that small business capital formation has been a "back-burner" issue at the SEC. He encouraged the SEC to finalize the Jobs Act Regulation A amendments. Additionally, he urged the SEC to be "mindful" of the cost-benefit analysis of its rulemaking.

See: Commissioner Gallagher's Speech.Related news: SEC Holds Government-Business Forum on Small Business Capital Formation (November 21, 2014); SEC Commissioner Gallagher Speaks about the SEC's Future Agenda (with Lofchie Comment) (October 17, 2014); SEC Commissioner Gallagher Discusses Promoting Small Business Capital Formation (September 17, 2014); SEC Commissioner Stein Discusses Capital Formation and Regulation A+ (October 24, 2014).