February 14, 2011
“President Obama’s request presents an admirable equilibrium. It proposes both fiscal restraint and needed resources for market oversight and enforcement.
The financial meltdown was a direct result of lax regulation and oversight. That is why the Wall Street Reform and Consumer Protection Act, passed by Congress and signed into law by President Obama last July, is so important. Without adequate funding of our financial market regulatory apparatus, the new legislation won’t mean much in the real world. We will once again be vulnerable to the conditions that created the recent economic chaos. Under the new law, the CFTC is to increase our regulatory purview from roughly $5 trillion in annualized trading to hundreds of trillions in trading. We are going to require more resources to do that in an efficient and effective fashion. President Obama’s budget request is commendable in this regard.
Included in the President’s budget is a request for Congress to provide authority to allow the CFTC to impose user fees on market participants. A specific proposal in that regard will be forthcoming from the Administration. I believe market oversight and enforcement is a public good and deserving of being funded in whole through annual appropriations. I discussed this issue in several speeches recently. There is no question in my mind that if the choice is between user fees or inadequate resources to fund oversight and enforcement, then we need to pull the trigger on user fees. Those who suggest that we can do the job of regulating hundreds of trillions in additional trading on our current budget are either misinformed, uniformed, or they look at inadequate funding as a way to starve the agency in the hope that regulatory reforms will be delayed or derailed. My message is simple: We needed the reform bill and now we need resources to make it work. We can’t make these needed regulatory changes with spare change.
Investors and consumers lost faith in our financial system when it nearly collapsed. Ordinary Americans with retirement accounts and college funds got squeamish and remain so. We need to move forward with these reforms in order to restore confidence in our markets. Only with adequate funding, such as the President has called for, will we be able to do that in a sure-footed manner.”
Last Updated: February 14, 2011