U.S. Chamber Cautions Against Permanent 'Too Big to Fail' Regulatory Model

Significant Concerns Remain with House Approach to Systemic Risk Regulation

WASHINGTON, D.C.—The U.S. Chamber of Commerce today expressed concern over legislation approved by the House Financial Services Committee to address the issue of systemic risk in our economy.

"This legislation is a move in the wrong direction," said David Hirschmann, president and CEO of the Chamber's Center for Capital Markets Competitiveness. "This scheme will create a permanent government bailout program that will harm our free enterprise system and distort our capital markets."

The Chamber has long called for legislation to modernize America's financial services regulatory framework and supports greater coordination among regulators including ways for them to better identify systemic risks. It also supports creating predictable and transparent rules to facilitate the orderly dissolution of failing financial institutions.

"What's been missing in the debate on financial regulatory reform is that fair, liquid and transparent capital markets are the fuel for a strong economy and job creation," said Hirschmann. "Regulatory reform should facilitate access to capital and job creation—not delay it. We need legislative proposals that move us toward that goal."

"While some practical improvements were made, such as the amendment offered by Rep. Himes to preserve the ability of companies to conduct internal financial activities, overall this bill was made worse by Committee action. For example, we oppose actions that would place a government imposed ceiling on the growth of U.S. companies. Placing a defined cap on the size of U.S. businesses will deter the growth of domestic companies and decrease America's economic competitiveness in relation to foreign markets.

Since its inception three years ago, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems. Fundamental to this effort, the Chamber believes we must eliminate duplicative and overlapping layers of regulation and enforcement that undermine efficiency.

The CCMC is committed to working aggressively with the administration, Congress, and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.

The U.S. Chamber is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.

# # #