GAO REPORT UNDERSCORES NEED TO MODERNIZE FINANCIAL REGS, IMPROVE COMPETITIVENESS
Report mandated by Crapo's 2006 legislation
Washington, DC – Idaho Senator Mike Crapo says a report released today by the U.S. Government Accountability Office (GAO) provides valuable information that Congress can use to improve U.S. global competitiveness with regard to U.S. financial markets. Today’s GAO report was mandated by Crapo’s Financial Services Regulatory Act of 2006.
“Congress needs to seriously consider this report and begin to examine and consider how to modernize our federal financial regulatory system,” Crapo said. “In a timely move that underscores the importance of the GAO report, the Treasury Department announced yesterday that it was undertaking a broad review of the regulatory structure associated with financial institutions. This is clearly an issue that needs attention.”
“To improve our country’s global competitiveness in the financial sector, we need to focus on three main questions: Does our financial services regulatory structure correspond to the needs and problems we face? Does that structure achieve its objectives? If so, does it achieve those objectives at a reasonable cost?” Crapo added.
The GAO report, available at Crapo’s web site at http://crapo.senate.gov/issues/american/competitiveness.cfm, was mandated to discuss:
• measurements of regulatory costs and benefits and efforts to avoid excessive regulatory burden;
• the challenges posed to financial regulators by trends in the industry; and
• what is the most cost-effective way to meet those objectives.
Crapo has joined with Senator Charles Schumer (D-New York) to focus attention on global competitiveness. The bipartisan effort has included a Sense of the Senate Resolution, which was included in the America COMPETES Act (H.R. 2272) signed by President Bush. The resolution calls for Congress, the President, regulators, industry leaders and other stakeholders to take the necessary steps to reclaim the preeminent position of the United States in the global financial services marketplace.
“The British approach to regulation is gaining a lot of praise,” Crapo continued. “It is a model for an effective system to oversee banks, brokers and investment funds, one that doesn’t impose onerous demands. A similar system here in the U.S. could improve the competitive approach to regulation like Britain’s Financial Services Authority, and I intend to explore ways to modernize our federal financial regulatory system.”
Crapo, the newly-appointed chairman of the Senate Republican Capital Markets Task Force, said the report will play a key role as Congress considers legislation to improve global competitiveness. He will continue to pursue reform efforts as a member of both the Senate Finance and Banking Committees.