- Nov 26, 2011
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Here is the transcript of a 2017 hearing about rolling back Dodd-Frank banking regulations: https://www.congress.gov/event/115th-congress/senate-event/LC51023/text
I would like to highlight the testimony of Saule Omarova, Professor of Law, Cornell University:
OMAROVA:
We are all here today because 9 years after the worst
financial crisis in generations, the banking industry is now
waging a massive campaign to roll back the Dodd-Frank Act and
the entire regime of post-crisis systemic risk regulation. The
banks claim that regulation is what directly prevents them from
lending to small businesses and struggling families and, thus,
prevents them from fostering America's economic growth. You
should take these claims with extreme skepticism.
First, it is important to understand what the banking
industry really means by growth. What America needs is real
economic growth--sustainable, socially inclusive, long-term
growth of the real, nonfinancial, sector of the American
economy. We need to restore the Nation's eroding industrial
base, rebuild and modernize our infrastructure, and create
sustainable, well-paying jobs. What we do not need is to have
another stock market or real estate bubble fed by cheap credit
and speculation in secondary markets.
Yet if Congress, you, deregulate big banks, that is
precisely what will grow. Big Wall Street banks derive the bulk
of their profits not from small business lending but from
massive high-risk trading and dealing in secondary markets.
They feed speculation, not real economic growth. That
speculation is precisely what caused the latest financial
crisis, and it will inevitably cause another one on your watch.
[snip]
Unless banks put their own money where their very loud and
very well paid mouths are, you should not read their claims
about fostering growth as anything more than convenient
rhetoric. Indeed, it is much more likely that big banks'
massive push for deregulation is driven by their desire to
generate high speculative trading profits, increase their
executives' bonuses, and return more dividend cash to their
shareholders. Right now, all of these things are significantly
limited by the Dodd-Frank regime of enhanced prudential
supervision, including heightened capital ratios, supervisory
stress testing, and living will requirements applicable to
large systemically important financial institutions, or SIFIs.
[snip]
In conclusion, I urge you to keep focus not on what banks
want for the sake of their own profitability, but on what the
American economy and the American people need: not another
speculative frenzy but sustainable, employment-generating
growth of the real economy. Financial deregulation will hinder,
not foster, such growth.
Thank you.
Saule Omarova called it. She nailed it. And Congress and the President failed to heed her prescient warning.
I would like to highlight the testimony of Saule Omarova, Professor of Law, Cornell University:
OMAROVA:
We are all here today because 9 years after the worst
financial crisis in generations, the banking industry is now
waging a massive campaign to roll back the Dodd-Frank Act and
the entire regime of post-crisis systemic risk regulation. The
banks claim that regulation is what directly prevents them from
lending to small businesses and struggling families and, thus,
prevents them from fostering America's economic growth. You
should take these claims with extreme skepticism.
First, it is important to understand what the banking
industry really means by growth. What America needs is real
economic growth--sustainable, socially inclusive, long-term
growth of the real, nonfinancial, sector of the American
economy. We need to restore the Nation's eroding industrial
base, rebuild and modernize our infrastructure, and create
sustainable, well-paying jobs. What we do not need is to have
another stock market or real estate bubble fed by cheap credit
and speculation in secondary markets.
Yet if Congress, you, deregulate big banks, that is
precisely what will grow. Big Wall Street banks derive the bulk
of their profits not from small business lending but from
massive high-risk trading and dealing in secondary markets.
They feed speculation, not real economic growth. That
speculation is precisely what caused the latest financial
crisis, and it will inevitably cause another one on your watch.
[snip]
Unless banks put their own money where their very loud and
very well paid mouths are, you should not read their claims
about fostering growth as anything more than convenient
rhetoric. Indeed, it is much more likely that big banks'
massive push for deregulation is driven by their desire to
generate high speculative trading profits, increase their
executives' bonuses, and return more dividend cash to their
shareholders. Right now, all of these things are significantly
limited by the Dodd-Frank regime of enhanced prudential
supervision, including heightened capital ratios, supervisory
stress testing, and living will requirements applicable to
large systemically important financial institutions, or SIFIs.
[snip]
In conclusion, I urge you to keep focus not on what banks
want for the sake of their own profitability, but on what the
American economy and the American people need: not another
speculative frenzy but sustainable, employment-generating
growth of the real economy. Financial deregulation will hinder,
not foster, such growth.
Thank you.
Saule Omarova called it. She nailed it. And Congress and the President failed to heed her prescient warning.
