On the one-year anniversary of the Dodd-Frank financial overhaul, top U.S. regulators on Thursday stressed the need to press forward with new rules to avert future crises as lawmakers refought the debate over the need for the law.
Democrats and Republicans on the Senate Banking Committee sparred over the impact of the sweeping Dodd-Frank overhaul, which touches every financial product from debit cards to complex derivatives and gives regulators broad new powers to oversee financial markets.
In a rehash of policy battles that highlighted the debate when Congress contemplated the law last year, Republicans charged it is causing more harm than good, while Democrats and regulators insisted on the need to address problems laid bare by the recent crisis.
Sen. Tim Johnson, who is chairman of the panel, lamented that the law, which was passed with little Republican support, has been "under constant attack" since it was enacted. Too many in Congress and on Wall Street have forgotten why the law is necessary, Sen. Johnson said, but "I have not."
Sen. Johnson's sentiment was echoed by Federal Reserve Chairman Ben Bernanke, who said the country's long-term economic prospects hinge on the ability to avoid or mitigate future crises.
"We must not lose sight of the reason that we began this process: ensuring that events like those of 2008 and 2009 are not repeated," Mr. Bernanke testified.
Since taking power in the House of Representatives last year, Republicans in Congress have sought to undo or change parts of the law and to limit funding for the federal agencies to implement it.
In Thursday's hearing, the heads of the Securities and Exchange Commission and the Commodity Futures Trading Commission said a House Republican-backed spending measure would prevent their agencies from making critical technology investments and hamper their oversight of the $600 trillion U.S. over-the-counter derivatives market, including swaps.
CFTC Chairman Gary Gensler said his agency would be able to finish writing the new swaps rules but wouldn't have enough people on hand to answer questions from the industry about them.
SEC Chairman Mary Schapiro said that under the GOP measure her agency would fall behind in responding to industry requests for guidance on how to comply with securities laws as well as requests for regulatory relief.
"I think everyone has a stake in wanting these agencies to have the ability to do their jobs," she said.
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