Gregg Statement On Financial Regulatory Reform

Statement

U.S. Senator Judd Gregg (R-NH), a member of the Senate Banking Committee, tonight issued the following statement on the Committee approval of Chairman Christopher Dodd's financial regulatory reform bill.

Senator Gregg stated, "For the past several months, members of the Senate Banking Committee have been working in earnest to develop bipartisan, comprehensive regulatory reform legislation. Unfortunately, Chairman Dodd recently felt the need to fast-forward this process by forcing the Committee's consideration of his second draft. While Chairman Dodd made some improvements to his original discussion draft, this legislation still fails to accomplish our goals of establishing a clear and concise framework to regulate financial institutions and protect investors, businesses and consumers, while ensuring that the United States remains the preeminent place for capital formation and job creation.

"In September of 2008, our nation faced the very real possibility of an economic collapse of incalculable proportions. Unfortunately, Chairman Dodd's bill does little to protect us against a similar situation in the future. Far from ending the concept of "too big to fail," this bill all but codifies it by pre-designating "systemically significant" institutions and providing them an implicit taxpayer guarantee. The Chairman's bill fails to address the ongoing crisis and the roles played by lax underwriting, overreliance on credit rating agencies, and government-sponsored enterprises like Fannie Mae and Freddie Mac. Furthermore, by separating the consumer protection from the safety and soundness mission for individual regulators, the bill actually puts consumers at greater risk.

"With regard to the highly complex over-the-counter derivatives market, the language included in the Dodd bill will restrict economic growth and innovation. Senator Reed and I continue to work on a provision aimed at addressing the role that over-the counter derivatives played in causing the financial crisis, while acknowledging the diversity of derivatives and the valuable role these risk management instruments play for industries throughout our economy. I am hopeful that we are able to reach a bipartisan agreement on the derivatives title before regulatory reform legislation is considered on the Senate floor.

"It is critical that we get these reforms right. Done incorrectly, these regulations have the capacity to cripple our economy and blunt America's competitive edge. I look forward to continuing to work with my colleagues in the hopes of producing bipartisan regulatory reform legislation that will provide stability to our financial system and yield long-term economic growth for our nation."

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