Financial Crises

 

 

By Thomas J. Donohue, President and CEO, U.S. Chamber of Commerce

 

Congress will focus in the coming days and months on the immediate housing and credit crises that have roiled markets worldwide. There is bipartisan momentum for mortgage relief on Capitol Hill, and the Chamber supports a targeted program to allow responsible home-owners to stay in their homes under renegotiated terms.

 

In addressing the regulatory weaknesses exposed by the current crises, our response should be comprehensive. Treasury Secretary Henry Paulson deserves credit for proposing a broad plan to modernize and streamline the financial regulatory structure. 

 

Current U.S. financial services regulation is a patchwork of federal and state regulatory authorities with overlapping jurisdiction, inconsistent rules, and a hodgepodge of regulatory philosophies. As new financial services, products, and instruments have emerged, government has failed to adapt to changing times and is stuck in a system designed for the economy of the 1930s.

 

We must establish a modern 21st century regulatory framework to ensure that our nation has the most efficient, innovative, fair, and well-regulated capital markets in the world. We should not try to create a regulatory system to prevent every market loss or economic downturn. This is virtually impossible and also undesirable, as it would undermine risk taking and the potential for reward.

 

Our overriding goal must be to create a nimble regulatory system that leaves businesses and investors with the flexibility they need to innovate and compete in a global economy.