WASHINGTON — Strong federal oversight is necessary to curb excess risk and insure stability in the securities industry, the head of the Federal Crisis Inquiry Commission told Congress on Tuesday.
“In the wake of this crisis, it is critical that the Dodd-Frank law be fully implemented,” FCIC Chairman Phil Angelides told the Senate Banking Committee. “I believe that the law’s financial reforms are strong and needed, and that the law directly and forcefully addresses issues and conclusions identified in our report.”
Angelides’s testimony follows efforts by Republicans in the House of Representatives to limit the power of the new consumer watchdog, the Consumer Financial Protection Bureau, and slow implementation of other provisions of the Dodd-Frank legislation.
“The FCIC report shows that repealing or undermining Dodd-Frank, as some have proposed would take us back to the same, weak financial system,” said Sen. Tim Johnson, the South Dakota Democrat and chairman of the Senate Committee on Banking, Housing and Urban Affairs. “We cannot allow Dodd-Frank to be dismantled.”
Repealing or undermining Dodd-Frank would “be dangerous and irresponsible,” Johnson said. “We simply cannot afford to go back to the old financial system that destroyed millions of jobs and cost the economy trillions of dollars.”
Congress created the bipartisan investigative panel to examine the causes of the financial collapse. In the final report, which was released more than three months ago, the commission faulted previous administrations, the Federal Reserve and financial regulators.
Congress enacted the Wall Street Reform and Consumer Protection Act, known as Dodd-Frank after its House and Senate sponsors, prior to the release of the commission’s findings.
Sen. Richard Shelby, the Alabama Republican who is ranking member, regarded the investigation as a “missed” opportunity.
“The Dodd-Frank legislation became a wish-list of reforms long sought by liberal activists, special interests and federal bureaucrats,” said Shelby.
Angelides who is a Democrat and former California state treasurer says that the “private enterprise system’s ability to take risks and succeed or fail is one of the greatest engines of the economy.”