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Banks offer feint praise for proposals

Posted on: Wednesday, 17 June 2009, 14:25 CDT

The Financial Services Roundtable, a bank lobbying group in Washington, said the U.S. financial system needs effective, as opposed to more, federal regulation.

The financial services industry does not necessarily need more regulation, but rather more effective regulation, the group said Wednesday in a quick reaction to President Barack Obama's 85-page draft proposal for a regulatory overhaul.

The Roundtable also said, our economic recovery depends on these reforms.

It is important to strengthen the system to protect the consumer, the industry and the economy, said Roundtable President and Chief Economic Officer Steve Bartlett, in a statement.

The group supported systemic risk oversight authority and orderly resolution of failing institutions, but said it opposed creation of a Consumer Financial Protection Agency, which would separate regulation of the entity from regulation of the product."

Washington think-tank, the Brookings Institute, said the proposals were virtually all sensible, necessary reforms, but lamented the political necessity of taking some clout out of some initiatives.

The current crisis highlighted the need for banks to increase capital cushion in the event of a downturn, the institute said in a statement.

In addition no one would design the banking regulatory system the way it is now if they were starting from scratch, the statement said.

Source: United Press International

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