BETTER MARKETS REPORT: EXPOSING WALL STREET’S POTENT PLAN TO DEFEAT FINANCIAL REFORM
Washington DC, July 30th, 2012 – Better Markets today released a Report exposing Wall Street’s latest, potentially lethal attack on financial reform: using cost-benefit analysis as a weapon. This assault has already had significant success, dramatically slowing and weakening implementation of financial reform. Unless it is effectively countered, it will put the country at grave risk of another financial crisis and more taxpayer bailouts.
The comprehensive Report released today, entitled “Setting the Record Straight on Cost-Benefit Analysis and Financial Reform at the SEC,” shows that Wall Street is engaged in yet another misinformation campaign in its unending quest to refocus the public debate away from the crisis and their role in creating it to the financial reform law and the rules implementing it. The industry’s latest tactic is to claim that rules implementing the Dodd-Frank financial reform law will impose crushing burdens on Wall Street and therefore must be subjected to exhaustive cost-benefit analysis, which the agencies will not be able to satisfy.
“While ‘cost-benefit analysis’ may sound innocent, the industry is distorting it to kill financial reform. Industry’s version of cost-benefit analysis counts all their costs, while excluding all the benefits to society, taxpayers, and our country of avoiding another financial collapse,” said Dennis Kelleher, CEO of Better Markets. “The insistence on cost-benefit analysis has no legal basis. Congress has never required the SEC to conduct cost-benefit analysis in its rulemakings,” Kelleher said.
This was a deliberate decision by Congress because it is well known that, in the area of financial regulation, cost-benefit analysis understates the benefits of regulation, drains agency resources, slows the rulemaking process, and actually forces agencies to second-guess judgments that Congress has already made about the need to protect the public. “It would be irrational for Congress and the President to pass a law to protect the American people from Wall Street only to enable the agencies to kill the law when Wall Street claims the costs it will bear are too high,” said Kelleher.
About Better Markets
Better Markets is a nonprofit, nonpartisan organization that promotes the public interest in financial reform in the domestic and global capital and commodity markets. Better Markets advocates for transparency, oversight, and accountability with the goal of a stronger, safer financial system that is less prone to crisis and failure.