“The Chamber of Commerce released its latest attack on financial reform today in the form of a report entitled ‘The Importance of Cost-benefit Analysis in Financial Regulation,’” said Dennis Kelleher, President of Better Markets, Inc., an independent nonprofit organization that promotes the public interest in the financial markets.
“Like Wall Street, the Chamber’s favorite weapon to attack financial reform rules is what it calls ‘cost-benefit analysis,’ which is really biased, one-sided, industry-costs-only analysis. It is all about industry’s costs, not the benefits to the country of avoiding another financial and economic crisis. It also ignores the cost of the last crisis, which will ultimately cost the country more than $12.8 trillion, as detailed in a recent Better Markets’ report,” Mr. Kelleher said.
“Deregulation and non-regulation is what enabled Wall Street’s reckless investments and trading to almost collapse the entire financial system. That is what required massive government and taxpayer bailouts. Those are the costs of not regulating Wall Street’s too-big-fail banks and those costs must be included in any economic analysis of financial reform rules,” said Mr. Kelleher.
“The Chamber’s report would burden the financial regulators with a duty to conduct expensive, time-consuming, imprecise and almost impossible-to-achieve analysis. This isn’t required by the law and would not result in better rulemaking. In fact, it would prevent the protection of the American people, increase the likelihood of another financial crisis and guarantee more taxpayer bailouts of Wall Street, also as detailed in a recent Better Markets report,” Mr. Kelleher said.
“Moreover, it must be recognized that no amount of analysis will satisfy the critics of financial reform, who want to protect Wall Street’s profits and bonuses, rather than taxpayers. The real goal of demanding more analysis is paralysis at the overwhelmed and underfunded agencies. If the Chamber, Wall Street and the other critics of financial reform rules were genuine, they would fight to significantly increase the budgets of the regulatory agencies, which would enable them to more quickly and thoroughly put the rules in place, avoid future bailouts and protect the American people. The fact they don’t do that reveals their true motives,” Mr. Kelleher concluded.
The Report on cost benefit analysis as a weapon of the industry can be found here.
The Report on the cost of the crisis can be found here.