WASHINGTON – Democratic Sen. Mark Warner of Virginia on Thursday urged Congress to fix the Dodd-Frank Wall Street reform law, but dismissed Republicans’ repeal on the law.
There’s “much to be done” in the financial regulatory system particularly “around transparency and around derivatives,” said Warner, who serves on the Senate Banking, Budget, Commerce and Intelligence committees.
Warner called for Congress to “revisit where we can make the fixes around Dodd-Frank” after the fall elections.
Signed into law in July 2010 by President Barack Obama, the Dodd-Frank Wall Street Reform and Consumer Protection Act affected all federal regulatory agencies and the nation’s financial services industry by creating the Financial Stability Oversight Council and the Office of Financial Research. But it received much criticism that it might not be sufficient to prevent another financial crisis or more bailouts.
While some Republicans, including presidential nominee Mitt Romney, suggest repealing the law, Warner warned the GOP-controlled House the consequences of completely throwing away Dodd-Frank.
“I don’t know what financial world (they) are living in,” Warner said. “Nothing will be more disrupted to the markets in terms of financial stability, of all the disruption in Europe, of the downturn of China and India, and the notion of this new framework, as imperfect as it is, that we’re going to throw it out and go back to the pre-2008 rules, I don’t think that’ll happen regardless who wins the election.”
Treasury Secretary Henry Paulson’s former chief economist, Phillip Swagel, agreed. He said with all the regulations implemented after the 2008 recession performing similar tasks, what needs to be done is better coordination among different financial agencies.
“Now it looks like the legislation and agencies are not dancing together and they’re stepping on each other’s toes,” Swagel said. “So I think they need to learn to dance better or just do a different kind of dance.”
Martin Baily, former chief economist to President Bill Clinton from 1999 to 2001, said the regulators should not be blamed, all is needed now is an “upgrade.”
“We need to try as hard as we can to create a system that has some kind of self-policing strategies to it,” Baily said.
Warner said he remained optimistic about the country’s economic future despite the looming fiscal cliff debate and the slowdown in global market, given what has been done post-recession.
“It shouldn’t be this hard, if you think about it,” Warner said. “I think it’s almost un-American that we can’t get this done. So I’m all-in on getting it done.”