HFSC on International Financial System with Sec . Lew
House
Financial Services Committee
The
State of the International Financial System
Tuesday,
March 22, 2016
Key
Topics & Takeaways
- Non-Bank SIFI Designation Process:
Rep. Luetkemeyer (R-Mo.) asked Lew to clarify whether he opposed raising
the threshold from $50 billion to $500 billion for designating financial
firms as systemically important financial institutions (SIFIs). Lew
clarified that there is simply a “big difference” between a $50 billion
and $500 billion threshold, which he said constitutes a “very large
financial institution.” Lew also maintained that an off-ramp to be
de-designated already exists in the Financial Stability Oversight
Council’s annual review process.
- Assistance for Puerto Rico: Lew maintained that
Puerto Rico needs an oversight authority to be its “gatekeeper” and an ability
to restructure all of its debt (including rescheduling, at a minimum, general
obligation debt).
- Data Localization in TPP: Lew agreed that data
localization, in general, is a barrier to free trade and maintained that the
Treasury has opposed it “vigorously” in the electronic payments processes.
Still, he explained that prudential regulators need to be guaranteed access to
“timely and appropriate information” and there were times during the financial
crisis they “were cut off.” However, Lew claimed there is “very limited room”
to change the TPP agreement, since it was “closed.” Rep. Royce (R-Calif.)
countered that Congress needs to see “demonstrable progress on this issue,” and
reiterated that it is a “prerequisite” to resolve this issue in a “credible
way.”
- EU Call for Evidence: Rep. Wagner
(R-Mo.) highlighted the EU’s Call for Evidence and asked whether the U.S.
agencies would be undertaking a similar review to examine unnecessary
regulatory burdens and unintended consequences. Lew acknowledged that
regulators need to continually review the impact of their rules, and claimed
that financial regulators are in the process of reviewing their rules to
determine which rules require reexamination. He also stated that they have been
holding “hearings all over the country” for this review.
Speakers
-
Jacob Lew, Secretary, U.S.
Treasury Department
Opening Remarks
In
his opening statement, Chairman Jeb Hensarling (R-Texas) said the international
financial system faces serious challenges from spending-driven debt and reckless
monetary policies around the globe. He noted that Congress approved needed
International Monetary Fund (IMF) reforms in December that reduced the U.S.
contribution to the IMF for the first time in history while also restoring a
rule limiting large loans to countries with unsustainable debt.
However,
Hensarling commented that it remains unclear whether the U.S. would ever be
eligible for an IMF bailout given its current spending trajectory. He argued
that President Obama’s legacy of debt may compromise national security and
increase the likelihood of fiscal crisis, and he criticized the Treasury
Department for “misleading” Congress as it has investigated Treasury’s
contingency spending plans.
Rep.
Gwen Moore (D-Wis.) thanked Republicans for working to pass IMF quota reform,
saying that was “the right thing for the world.” She added that she was pleased
that capital control policies in the Trans-Pacific Partnership (TPP) were
harmonized with IMF guidelines, and also expressed an interest in hearing about
the Treasury Department’s anti-money laundering (AML) efforts.
Rep.
Bill Huizenga (R-Mich.) stated his concern about the role of the IMF in any
future bailout of Greece, pointing out that the country did not meet the
criteria for exceptional access lending in its previous bailout. He said the
Treasury Department should push the IMF to reject any further bailouts of
Greece.
Ranking
Member Maxine Waters (D-Calif.) lauded the approval of IMF quota reform,
calling it an important achievement and a positive reflection on the work of
Treasury officials and Democratic leaders. She said the delay of its passage
had been putting the world economy and financial system in “serious jeopardy.”
Waters welcomed provisions to eliminate the systemic exemption for emergency lending,
but warned that any rigid, pre-determined thresholds will “inevitably conflict”
with the circumstances of reality.
Testimony
In
his prepared
testimony, Secretary Lew noted the continued strength of the U.S. economy,
mentioning its “record-breaking streak of job creation” and the continuation of
a sound fiscal path as the deficit as a share of gross domestic product (GDP)
has continued to drop. He then discussed the importance of the U.S. role in
international financial institutions, explaining that investments in them help
protect American strategic interests and international stability. He stressed
that organizations such as the IMF and multilateral development banks help the
U.S. to address its national interests and argued that a failure to meet U.S.
commitments to them would only weaken America’s ability to shape the
institutions’ policy priorities.
Question and Answer
Rep.
Ed Royce (R-Calif.) stated that data localization constitutes a trade barrier.
However, he noted that the TPP excludes the financial services sector from
prohibitions on data localization and asked about progress towards achieving a
side agreement with TPP partners. Lew agreed that data localization, in
general, is a barrier to free trade and maintained that the Treasury has
opposed it “vigorously” in the electronic payments processes. However, Lew
referenced the competing interests between preventing a non-tariff barriers and
ensuring prudential regulators have access to information they need to
supervise financial services firms active in the U.S. Lew claimed there is
“very limited room” to change the TPP agreement, but Royce countered that
Congress needs to see “demonstrable progress on this issue,” and reiterated
that it is a “prerequisite” to resolve this issue in a “credible way.”
Rep.
French Hill (R-Ark.) also expressed concerns with the treatment of cross-border
data flows for financial services firms under TPP, and Lew agreed that it is a
“very difficult” issue. Still, he explained that prudential regulators need to
be guaranteed access to “timely and appropriate information” and there were
times during the financial crisis they “were cut off.” He further explained
that TPP is “closed” and “cannot” be reopened, but said that this issue will
frame future Transatlantic Trade and Investment Partnership (TTIP) and
bilateral investment treaty (BIT) negotiations.
TTIP
Hill
asked about the progress made in TTIP. Lew responded that negotiators have had
“challenging discussions” with EU officials on this issue and maintained that
he believes financial market opening should be part of the agreement, but not
prudential regulation.
Rep.
Ann Wagner (R-Mo.) highlighted the EU’s Call for Evidence and asked whether the
U.S. agencies would be undertaking a similar review to examine unnecessary
regulatory burdens and unintended consequences. Lew acknowledged that
regulators need to continually review the impact of their rules, and claimed
that financial regulators are in the process of reviewing their rules – as part
of a five year review process – to determine which rules require reexamination.
He also stated that they have been holding “hearings all over the country” for
this review.
Wagner
also asked whether the Treasury will examine the impact of rules that have not
yet been implemented – including Basel IV and the Fundamental Review of the
Trading Book – to see how they fit into the existing regulatory architecture.
Lew contended that the Treasury’s view is to look at risks of the future, not
the past, to ensure that its rules do not become outdated.
TBTF
and Market Liquidity
Rep.
Keith Rothfus (R-Pa.) argued that the Dodd-Frank Act enshrined “too big to
fail” into law. He also asked whether Lew agreed with a 2015 report by the
Office of Financial Research that concluded that market liquidity has become
more fragile and that broker-dealer inventories shrunk as a result of bank
capital standards and Volcker Rule. Lew maintained that liquidity in Treasury
markets is “within historical ranges” and explained that he is “not convinced”
that regulation is a key driver to the alleged decline in market liquidity.
Puerto
Rico
Rep.
Carolyn Maloney (D-N.Y.) noted that Puerto Rico does not have access to Chapter
9 of the Bankruptcy Code or other restructuring processes to renegotiate its
debt obligations with creditors. She also noted the ongoing Supreme Court case
that is considering whether Puerto Rico could enact its own municipal
Bankruptcy Code, and asked whether a territorial bankruptcy regime would harm
the broader municipal bond market in America. Lew explained that “three leading
bond analysts” contradict the argument that allowing Puerto Rico to restructure
its debt would have spillover effects on the rest of the municipal bond market,
since each issuance is examined individually based on its risk profile. Lew
maintained that Puerto Rico needs an oversight authority to be its “gatekeeper”
and an ability to restructure all of its debt (including rescheduling, at a
minimum, general obligation debt).
Rep.
Blaine Luetkemeyer (R-Mo.) asked Lew to clarify whether he was opposed to
raising the threshold from $50 billion to $500 billion for designating
financial firms as systemically important financial institutions (SIFIs). Lew
clarified that he simply drew a distinction that there is a “big difference”
between a $50 billion and $500 billion threshold, which he said constitutes a
“very large financial institution.” Lew also affirmed that size is an important
criterion in determining whether a financial firm should be designated as a
SIFI, and maintained that an off-ramp to be dedesignated already exists in the
Financial Stability Oversight Council’s (FSOC) annual review process.
Financial
Stability Oversight Council
Rep.
Frank Guinta (R-N.H.) asked what the agency is doing to ensure that other
members of the FSOC are properly safeguarding information. Lew explained that
the FSOC’s mandate to monitor systemic risk requires “sharing information in an
appropriate way.” He explained that data is shared across the agencies in an
anonymized way and that each regulator has statutory obligations to which it must
comply.
Comment
Periods on International Rules
Rep.
Scott Garrett (R-N.J.) asked why the Treasury does not elicit the American
people’s opinions about policies promulgated by international bodies such as
the Financial Stability Board (FSB) as it does for domestic policy changes. Lew
maintained that there are several mechanisms to consult with private and public
stakeholders in international proceedings, and explained that work done by the
FSB does not set U.S. policy. He clarified that when Treasury or other agencies
make U.S. policies and rules, they go through the notice and comment process.
Debt
Limit Contingency Planning
Luetkemeyer
noted that, since 2011, the New York Fed has conducted tabletop exercises to
prioritize payments on debt in the event that the debt ceiling was not raised,
and asked whether Treasury directed these exercises. Lew explained that the
N.Y. Fed was trying to test “how the pipes would work” if Congress failed to
increase the debt limit. He further explained that the Treasury does not know
whether the technical capabilities would work because they have “never been
tried.”
Hensarling
also asked about Lew’s knowledge of the tabletop exercises, and Lew responded
that the agencies examine what is “technically possible” in those scenarios but
argued the “real point” that it is the “highest state of irresponsibility” for
Congress to ask the agencies to develop a workable plan for the U.S. government
to default on its debt obligations.
Rep.
Luke Messer (R-Ind.) maintained that it is “remarkable how little transparency”
is provided with regard to the “extraordinary measures” taken by the Treasury
to meet its obligations if the debt ceiling is reached, and he explained that
an amendment recently passed would require the Treasury to publish information
on those extraordinary measures. Lew explained that he is not familiar with the
amendment but will look into it.
China
Slowdown
Waters
asked about the implications of a slowdown in China for the U.S. and global
economies. Lew explained that since China purchases a vast amount of inputs
from around the world, its economic cycle influences global growth. Still, Lew
noted that China is in the middle of transitioning toward a market oriented
system and maintained that it would be “bumpier” during that transition. Lew
argued that China must stick to the reform path to allow market signals to
direct the allocation of resources in its economy.
Support
for IMF
Huizenga
argued that the Greeks have suffered under the IMF’s reform package and that it
has only increased its debt to GDP ratio, while doing “little to improve the
lives of its citizens.” He asked why the U.S. should continue to give the IMF
more taxpayer dollars to support Greece and stated that he would introduce a
bill today on this issue. Lew explained that Greece has enacted several
important reforms over last few years, “more than others ever thought
possible,” and explained that it is important for Europe to have the IMF as a
partner in addressing the economic and debt crisis there.
Budget
& Deficit
Moore
asked whether Lew thought that austerity measures would help reduce the
nation’s deficit. Lew explained that policymakers must ensure that fiscal
policies contribute to economic growth, and to solidify a strong foundation
before it looks to address long-term economic challenges. Lew referenced his
time as director of the Office of Management and Budget (OMB) and stated that
he “understand[s] the value of fiscal discipline” but maintained that
policymakers cannot balance the budget without a growing economy. Lew
reiterated that the time is ripe to invest in U.S. infrastructure at low
interest rates.
Rep.
Michael Capuano (D-Mass.) noted several concerns expressed about the deficit
and debt levels, but added that nobody mentioned the Bush tax cuts that were
“totally unnecessary” and two wars, one of which was also “totally
unnecessary,” as well as the tax extenders voted on last year that increased
deficit by trillions of dollars. Lew explained that the current
Administration’s fiscal policy went from a “skyrocketing deficit” to a “stable
situation” with a reduced deficit to 2.5% of GDP.
Accommodating
Small Institutions
Rep.
Scott Tipton (R-Colo.) highlighted the adverse impacts of regulatory burdens on
small financial institutions, and Lew explained that he encourages all of the
prudential regulators to use their flexibility to not have a
“one-size-fits-all” approach, and to see what they can do to provide proper
accommodation to small institutions that do not present the kinds of risks that
larger ones do. However, Lew stated that a piece of legislation that would
repeal major parts of the financial regulatory architecture is not the
direction in which they are heading.
Additional
information about this event can be accessed here.
,Blog Tags:,Blog Categories:,Blog TrackBack:,Blog Pingback:No,Hearing Summaries Issues:International/Trade,Hearing Summaries Agency:House Financial Services Committee,Publish Year:2016
House
Financial Services Committee
The
State of the International Financial System
Tuesday,
March 22, 2016
Key
Topics & Takeaways
- Non-Bank SIFI Designation Process:
Rep. Luetkemeyer (R-Mo.) asked Lew to clarify whether he opposed raising
the threshold from $50 billion to $500 billion for designating financial
firms as systemically important financial institutions (SIFIs). Lew
clarified that there is simply a “big difference” between a $50 billion
and $500 billion threshold, which he said constitutes a “very large
financial institution.” Lew also maintained that an off-ramp to be
de-designated already exists in the Financial Stability Oversight
Council’s annual review process.
- Assistance for Puerto Rico: Lew maintained that
Puerto Rico needs an oversight authority to be its “gatekeeper” and an ability
to restructure all of its debt (including rescheduling, at a minimum, general
obligation debt).
- Data Localization in TPP: Lew agreed that data
localization, in general, is a barrier to free trade and maintained that the
Treasury has opposed it “vigorously” in the electronic payments processes.
Still, he explained that prudential regulators need to be guaranteed access to
“timely and appropriate information” and there were times during the financial
crisis they “were cut off.” However, Lew claimed there is “very limited room”
to change the TPP agreement, since it was “closed.” Rep. Royce (R-Calif.)
countered that Congress needs to see “demonstrable progress on this issue,” and
reiterated that it is a “prerequisite” to resolve this issue in a “credible
way.”
- EU Call for Evidence: Rep. Wagner
(R-Mo.) highlighted the EU’s Call for Evidence and asked whether the U.S.
agencies would be undertaking a similar review to examine unnecessary
regulatory burdens and unintended consequences. Lew acknowledged that
regulators need to continually review the impact of their rules, and claimed
that financial regulators are in the process of reviewing their rules to
determine which rules require reexamination. He also stated that they have been
holding “hearings all over the country” for this review.
Speakers
-
Jacob Lew, Secretary, U.S.
Treasury Department
Opening Remarks
In
his opening statement, Chairman Jeb Hensarling (R-Texas) said the international
financial system faces serious challenges from spending-driven debt and reckless
monetary policies around the globe. He noted that Congress approved needed
International Monetary Fund (IMF) reforms in December that reduced the U.S.
contribution to the IMF for the first time in history while also restoring a
rule limiting large loans to countries with unsustainable debt.
However,
Hensarling commented that it remains unclear whether the U.S. would ever be
eligible for an IMF bailout given its current spending trajectory. He argued
that President Obama’s legacy of debt may compromise national security and
increase the likelihood of fiscal crisis, and he criticized the Treasury
Department for “misleading” Congress as it has investigated Treasury’s
contingency spending plans.
Rep.
Gwen Moore (D-Wis.) thanked Republicans for working to pass IMF quota reform,
saying that was “the right thing for the world.” She added that she was pleased
that capital control policies in the Trans-Pacific Partnership (TPP) were
harmonized with IMF guidelines, and also expressed an interest in hearing about
the Treasury Department’s anti-money laundering (AML) efforts.
Rep.
Bill Huizenga (R-Mich.) stated his concern about the role of the IMF in any
future bailout of Greece, pointing out that the country did not meet the
criteria for exceptional access lending in its previous bailout. He said the
Treasury Department should push the IMF to reject any further bailouts of
Greece.
Ranking
Member Maxine Waters (D-Calif.) lauded the approval of IMF quota reform,
calling it an important achievement and a positive reflection on the work of
Treasury officials and Democratic leaders. She said the delay of its passage
had been putting the world economy and financial system in “serious jeopardy.”
Waters welcomed provisions to eliminate the systemic exemption for emergency lending,
but warned that any rigid, pre-determined thresholds will “inevitably conflict”
with the circumstances of reality.
Testimony
In
his prepared
testimony, Secretary Lew noted the continued strength of the U.S. economy,
mentioning its “record-breaking streak of job creation” and the continuation of
a sound fiscal path as the deficit as a share of gross domestic product (GDP)
has continued to drop. He then discussed the importance of the U.S. role in
international financial institutions, explaining that investments in them help
protect American strategic interests and international stability. He stressed
that organizations such as the IMF and multilateral development banks help the
U.S. to address its national interests and argued that a failure to meet U.S.
commitments to them would only weaken America’s ability to shape the
institutions’ policy priorities.
Question and Answer
Rep.
Ed Royce (R-Calif.) stated that data localization constitutes a trade barrier.
However, he noted that the TPP excludes the financial services sector from
prohibitions on data localization and asked about progress towards achieving a
side agreement with TPP partners. Lew agreed that data localization, in
general, is a barrier to free trade and maintained that the Treasury has
opposed it “vigorously” in the electronic payments processes. However, Lew
referenced the competing interests between preventing a non-tariff barriers and
ensuring prudential regulators have access to information they need to
supervise financial services firms active in the U.S. Lew claimed there is
“very limited room” to change the TPP agreement, but Royce countered that
Congress needs to see “demonstrable progress on this issue,” and reiterated
that it is a “prerequisite” to resolve this issue in a “credible way.”
Rep.
French Hill (R-Ark.) also expressed concerns with the treatment of cross-border
data flows for financial services firms under TPP, and Lew agreed that it is a
“very difficult” issue. Still, he explained that prudential regulators need to
be guaranteed access to “timely and appropriate information” and there were
times during the financial crisis they “were cut off.” He further explained
that TPP is “closed” and “cannot” be reopened, but said that this issue will
frame future Transatlantic Trade and Investment Partnership (TTIP) and
bilateral investment treaty (BIT) negotiations.
TTIP
Hill
asked about the progress made in TTIP. Lew responded that negotiators have had
“challenging discussions” with EU officials on this issue and maintained that
he believes financial market opening should be part of the agreement, but not
prudential regulation.
Rep.
Ann Wagner (R-Mo.) highlighted the EU’s Call for Evidence and asked whether the
U.S. agencies would be undertaking a similar review to examine unnecessary
regulatory burdens and unintended consequences. Lew acknowledged that
regulators need to continually review the impact of their rules, and claimed
that financial regulators are in the process of reviewing their rules – as part
of a five year review process – to determine which rules require reexamination.
He also stated that they have been holding “hearings all over the country” for
this review.
Wagner
also asked whether the Treasury will examine the impact of rules that have not
yet been implemented – including Basel IV and the Fundamental Review of the
Trading Book – to see how they fit into the existing regulatory architecture.
Lew contended that the Treasury’s view is to look at risks of the future, not
the past, to ensure that its rules do not become outdated.
TBTF
and Market Liquidity
Rep.
Keith Rothfus (R-Pa.) argued that the Dodd-Frank Act enshrined “too big to
fail” into law. He also asked whether Lew agreed with a 2015 report by the
Office of Financial Research that concluded that market liquidity has become
more fragile and that broker-dealer inventories shrunk as a result of bank
capital standards and Volcker Rule. Lew maintained that liquidity in Treasury
markets is “within historical ranges” and explained that he is “not convinced”
that regulation is a key driver to the alleged decline in market liquidity.
Puerto
Rico
Rep.
Carolyn Maloney (D-N.Y.) noted that Puerto Rico does not have access to Chapter
9 of the Bankruptcy Code or other restructuring processes to renegotiate its
debt obligations with creditors. She also noted the ongoing Supreme Court case
that is considering whether Puerto Rico could enact its own municipal
Bankruptcy Code, and asked whether a territorial bankruptcy regime would harm
the broader municipal bond market in America. Lew explained that “three leading
bond analysts” contradict the argument that allowing Puerto Rico to restructure
its debt would have spillover effects on the rest of the municipal bond market,
since each issuance is examined individually based on its risk profile. Lew
maintained that Puerto Rico needs an oversight authority to be its “gatekeeper”
and an ability to restructure all of its debt (including rescheduling, at a
minimum, general obligation debt).
Rep.
Blaine Luetkemeyer (R-Mo.) asked Lew to clarify whether he was opposed to
raising the threshold from $50 billion to $500 billion for designating
financial firms as systemically important financial institutions (SIFIs). Lew
clarified that he simply drew a distinction that there is a “big difference”
between a $50 billion and $500 billion threshold, which he said constitutes a
“very large financial institution.” Lew also affirmed that size is an important
criterion in determining whether a financial firm should be designated as a
SIFI, and maintained that an off-ramp to be dedesignated already exists in the
Financial Stability Oversight Council’s (FSOC) annual review process.
Financial
Stability Oversight Council
Rep.
Frank Guinta (R-N.H.) asked what the agency is doing to ensure that other
members of the FSOC are properly safeguarding information. Lew explained that
the FSOC’s mandate to monitor systemic risk requires “sharing information in an
appropriate way.” He explained that data is shared across the agencies in an
anonymized way and that each regulator has statutory obligations to which it must
comply.
Comment
Periods on International Rules
Rep.
Scott Garrett (R-N.J.) asked why the Treasury does not elicit the American
people’s opinions about policies promulgated by international bodies such as
the Financial Stability Board (FSB) as it does for domestic policy changes. Lew
maintained that there are several mechanisms to consult with private and public
stakeholders in international proceedings, and explained that work done by the
FSB does not set U.S. policy. He clarified that when Treasury or other agencies
make U.S. policies and rules, they go through the notice and comment process.
Debt
Limit Contingency Planning
Luetkemeyer
noted that, since 2011, the New York Fed has conducted tabletop exercises to
prioritize payments on debt in the event that the debt ceiling was not raised,
and asked whether Treasury directed these exercises. Lew explained that the
N.Y. Fed was trying to test “how the pipes would work” if Congress failed to
increase the debt limit. He further explained that the Treasury does not know
whether the technical capabilities would work because they have “never been
tried.”
Hensarling
also asked about Lew’s knowledge of the tabletop exercises, and Lew responded
that the agencies examine what is “technically possible” in those scenarios but
argued the “real point” that it is the “highest state of irresponsibility” for
Congress to ask the agencies to develop a workable plan for the U.S. government
to default on its debt obligations.
Rep.
Luke Messer (R-Ind.) maintained that it is “remarkable how little transparency”
is provided with regard to the “extraordinary measures” taken by the Treasury
to meet its obligations if the debt ceiling is reached, and he explained that
an amendment recently passed would require the Treasury to publish information
on those extraordinary measures. Lew explained that he is not familiar with the
amendment but will look into it.
China
Slowdown
Waters
asked about the implications of a slowdown in China for the U.S. and global
economies. Lew explained that since China purchases a vast amount of inputs
from around the world, its economic cycle influences global growth. Still, Lew
noted that China is in the middle of transitioning toward a market oriented
system and maintained that it would be “bumpier” during that transition. Lew
argued that China must stick to the reform path to allow market signals to
direct the allocation of resources in its economy.
Support
for IMF
Huizenga
argued that the Greeks have suffered under the IMF’s reform package and that it
has only increased its debt to GDP ratio, while doing “little to improve the
lives of its citizens.” He asked why the U.S. should continue to give the IMF
more taxpayer dollars to support Greece and stated that he would introduce a
bill today on this issue. Lew explained that Greece has enacted several
important reforms over last few years, “more than others ever thought
possible,” and explained that it is important for Europe to have the IMF as a
partner in addressing the economic and debt crisis there.
Budget
& Deficit
Moore
asked whether Lew thought that austerity measures would help reduce the
nation’s deficit. Lew explained that policymakers must ensure that fiscal
policies contribute to economic growth, and to solidify a strong foundation
before it looks to address long-term economic challenges. Lew referenced his
time as director of the Office of Management and Budget (OMB) and stated that
he “understand[s] the value of fiscal discipline” but maintained that
policymakers cannot balance the budget without a growing economy. Lew
reiterated that the time is ripe to invest in U.S. infrastructure at low
interest rates.
Rep.
Michael Capuano (D-Mass.) noted several concerns expressed about the deficit
and debt levels, but added that nobody mentioned the Bush tax cuts that were
“totally unnecessary” and two wars, one of which was also “totally
unnecessary,” as well as the tax extenders voted on last year that increased
deficit by trillions of dollars. Lew explained that the current
Administration’s fiscal policy went from a “skyrocketing deficit” to a “stable
situation” with a reduced deficit to 2.5% of GDP.
Accommodating
Small Institutions
Rep.
Scott Tipton (R-Colo.) highlighted the adverse impacts of regulatory burdens on
small financial institutions, and Lew explained that he encourages all of the
prudential regulators to use their flexibility to not have a
“one-size-fits-all” approach, and to see what they can do to provide proper
accommodation to small institutions that do not present the kinds of risks that
larger ones do. However, Lew stated that a piece of legislation that would
repeal major parts of the financial regulatory architecture is not the
direction in which they are heading.
Additional
information about this event can be accessed here.