Last week, Treasury Secretary Tim Geithner penned an op-ed in the Wall Street Journal which discussed the perils of financial crisis amnesia. And on Friday, Deputy Treasury Secretary Neal Wolin appeared on CNBC’s Squak Box and on Bloomberg TV to reinforce the importance of implementing Wall Street Reform and contrast the terrible costs of crisis with the complaints of those attempting to weaken or repeal that reform. Read a few excerpts of the interviews:
“I think the basic point here is we want to make sure everyone remembers what brought us to the place, that the financial system that we had in 2008 and 2009 was manifestly inadequate, it led to the destruction of enormous amounts of wealth and wrecked our economy, and that Congress put forward and the President signed legislation that overwhelmingly strengthens our financial situation in a way that protects taxpayers and puts us on a sounder footing and sometimes those basic thoughts get lost in the conversation as people try to push off and delay and rewrite and even repeal some of these really critical elements of making our financial system stronger, more resilient and more protective of American taxpayers.”
“I think there's no evidence, frankly, Joe, that the Dodd-Frank legislation or bits and pieces that are being implemented as we go forward have had any negative effect on our financial system. Fundamentally, it's putting our financial system in a much stronger, much safer, much more robust position and I think that, you know, that's the important point to keep in mind. It is, of course, the case that, as regulators continue the process of putting forth rules they need to do so in a way that is thoughtful and takes into account the range of views that are out there. That's exactly what they are doing. They are putting out these rules. People are having their ability to express their perspectives and those perspectives will be factored in. But I think what we shouldn't lose sight of is the importance of the basic set of reforms that were enacted and the need to get on with the business of putting those things in place. Of course they should be done in a sensible way.”
“I think we should be attentive to the cost of compliance, there’s no question. Part of the original underpinnings of Dodd-Frank is we had a financial system that was insufficiently regulated. So there’s going to be some cost of compliance. The real question to ask is, ‘What are the costs relative to not having the reforms?’ We saw that firms across the country and American citizens and small businesses paid an enormous price not to have the kinds of things in place that make our system strong and resilient. So it is the case it will cost some money for firms to comply with this new set of rules. We think that's a worthy investment relative to what we've all just been through and what we’ve all just experienced and what we might have to be through or experience if we didn't put this stuff in place.”
“I think from our perspective at Treasury it's not about the rhetoric, really. It's really about the substance, about the idea that, we had a system that everyone agrees wasn't the right system. We put in place a set of strong reforms to get ourselves on a better footing and now we should be serious and thoughtful about going about the business of implementing all of that. That's what we're doing. And I think sometimes we get caught up in the rhetoric of, you know, from critics of this legislation that this will kill the economy or it's going to kill the financial services sector. There's no evidence of that. It doesn't make any sense.”
“We need to remember what the financial crisis brought to this country in the form of lost wealth and all the dislocation. Congress passed a statute the President signed which went awfully far to making sure we have the protections in the financial system we need and that we protect our taxpayers. I think we have begun putting in place the pieces that really do that. Banks are much better capitalized than they were before. We now have a resolution process that makes sure the taxpayers are protected when a firm fails. We have a Consumer Protection Bureau that is working on making sure consumers get clear disclosure and have the basis to make big, important decisions within their own lives and the work continues. I think all of that has put our financial system in a much stronger much more resilient much safer place. And that’s critically important, that work needs to continue.”
Erika Gudmundson is New Media Specialist at the Department of the Treasury.