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Economy Update: Romney Discusses Banking Regulations

by Newsteam Staff
July 31, 2012

President Barack Obama signs the Dodd-Frank Wall Street Reform and Consumer Protection Act as Senator Christopher Dodd (D-CT) (C) and Rep. Barney Frank (D-MA) look on in Washington, July 21, 2010 (Jim Young/Courtesy Reuters). President Barack Obama signs the Dodd-Frank Wall Street Reform and Consumer Protection Act as Senator Christopher Dodd (D-CT) (C) and Rep. Barney Frank (D-MA) look on in Washington, July 21, 2010 (Jim Young/Courtesy Reuters).

While in London, presumptive GOP presidential nominee Mitt Romney told a group of bankers at a fundraiser that Republicans may have been wrong to call for less regulation of the banking industry (HuffPost), but that doesn’t mean he approves of the regulations President Barack Obama signed into law in 2010.

“We have in our party, I think, on occasion misspoken by just saying we’re for deregulation — to some that means we want to get rid of all regulation,” Romney said last week. “That’s not true. Of course you have to have laws and regulations to make free markets able to produce and to be effective.”

However, he also reiterated his opposition to the so-called Dodd-Frank bill, aimed at staving off risky practices and prevent a repeat of the 2008 Wall Street meltdown, saying it has  hurt small community banks and, in turn, small businesses (CNN). He said he would repeal the law if elected, rebuilding U.S. financial regulation from the ground up.

Patrick Reis and MJ Lee at Politico write that according to Republicans in Congress, “fixing” the law is more likely than building “a movement to repeal and replace” it.”But by holding back on proposing sweeping changes to Dodd-Frank, Republicans deprive Democrats of a chance to paint Romney and other Republicans of being too cozy with a banking industry that remains unpopular among voters in the wake of the financial crisis and government bailouts,” they say.

For more on the candidates’ stances, check this issue tracker on The Candidates and the Economy.

Suggested Other Reading:

This CFR Backgrounder explains the Dodd-Frank Wall Street Reform and Consumer Protection Act, known as “Dodd-Frank,” its major provisions, and its implementation over the past two years.

At the National Review, Ammon Simon writes that Dodd-Frank is riddled with constitutional problems, is bad for the U.S. economy as it stands, and is still far from fully implemented. “Dodd-Frank hurts our economy because one of its central premises is that bureaucratic experts with near-unlimited discretion make the best stewards of our economy. These experts believe that if they promulgate enough rules, they can somehow fix our complicated financial system,” Simon says.

The San Francisco Chronicle’s Todd Miller says that two years later, the bill is doing more good than harm. “The solutions devised by Dodd-Frank are not perfect. But despite its shortcomings, Dodd-Frank is an important and necessary step toward doing what it set out to do – stabilizing the economy and preventing another catastrophic collapse of the type that set off the Great Recession.”

– Gayle S. Putrich, Contributing Editor

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