U.S. Representative Ed Royce (R-Calif.) questioned witnesses on impacts of the proposed Financial CHOICE Act versus those of the Dodd-Frank Act on capital formation, community financial institutions, and international financial regulation during today’s House Financial Services Committee hearing entitled “Making a Financial Choice: More Capital or More Government Control?”
“I have been struck by a view that I think is rather myopic: The view of some critics of the Financial CHOICE Act who have suggested that the required higher capital levels will result in a sharp contraction in credit availability. Don’t we also have to factor in the sharp reduction in compliance costs that will result from [institutions] being freed from Basel III and Dodd-Frank’s endlessly complex mandates? Wouldn’t [the Financial CHOICE Act] free up these significant resources that would be redirected to lending and job-creating activities?” asked Rep. Royce.
“Absolutely. I think today banks are focused on the wrong thing. They are focused on making government bureaucrats happy instead of investing in their business and in their customer base. So technically, ok, we have to raise more capital. But if that capital can be used productively to grow the economy, that’s a good thing. It’s bad for banks to …read more
Source:: U.S. Rep. Ed Royce