U.S. Senator Judd Gregg (R-NH), a member of the Senate Banking Committee, issued the following statement on the opening day of the financial regulatory reform conference committee between the House and Senate. Senator Gregg is one of five Senate Republican members appointed to the conference committee.
Senator Gregg stated, "The goal of financial regulatory reform should be to produce legislation that reduces systemic risk in our financial sector while encouraging America's entrepreneurial spirit and maintaining our country's preeminence in capital credit markets and thus job creation. Although the bills passed by the House and Senate take steps in the right direction to bring greater transparency and accountability to Wall Street, these bills are also riddled with flawed provisions. They will have significant unintended consequences on financial markets and hinder the ability of American families and businesses to access credit at a reasonable cost.
"The Senate derivatives title is especially concerning and, if left in its current form, will cause a massive contraction of credit in this country. This entire title should be stricken and replaced with a more balanced approach to over-the-counter derivatives regulation that ensures greater market oversight and transparency while taking into account the unique needs of commercial businesses to hedge risk. In addition, the capital requirements provision that was added to the Senate bill without any real debate on the Senate floor will further constrict banks' ability to lend and do business, ultimately harming consumers. Neither the House or Senate bill also takes any action on the core issues that were the driving force behind the 2008 financial crisis: poor underwriting standards and the government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac.
"As the conference committee moves forward, I am hopeful that my colleagues will recognize the serious flaws in these bills and work together to produce a final product that does not run counter to our goals of supporting a strong and robust American economy that creates jobs."