The Rules of the Road: How We Keep America's Capital Markets the Best in the World

There's a phrase that kept surfacing at the U.S. Chamber's Capital Markets Summit, not as a slogan but as a genuine conviction shared across regulators, lawmakers, and industry leaders.

"The United States has the best capital markets in the world," said SEC Commissioner Hester Peirce. "People come here from all over the world to raise money and to invest. Our markets have helped build the globe's companies and its economies. Other countries look longingly to the U.S. capital markets and hope to emulate them."

Why does any of this matter beyond Wall Street? "Deep, liquid, well-regulated capital markets do not just support issuers and intermediaries," said Jim Febeo of Fidelity Investments. "They support the long-term financial security of American families, workers, and retirees." Capital markets are the mechanism by which a small manufacturer in Ohio accesses growth capital, by which a retiree's 401(k) compounds over decades, by which the American economy sustains the kind of growth—the 3% growth ideal—that lifts living standards broadly.

A panel on the Future of American Capital drove it home: Joe Shamess, founder and general partner of Flintlock Capital, described the relationship between public and private markets as fundamentally collaborative. "The public market and private market are doing that together," he said. "It's a symphony. We all play our role. I don't care if you're an angel investor or a friends and family investor, it all adds up."

Nowhere was the tension between stability and growth more apparent than in the discussions around Basel III capital requirements, an internationally agreed-upon set of banking regulations developed by the Basel Committee on Banking Supervision to strengthen the regulation, supervision, and risk management of banks. Ryan Thompson of U.S. Bank put the challenge plainly: the purpose of capital is "to absorb risk of loss and provide certainty of financial stability." But overcalibrate the rules, he warned, and you impede a bank's ability to serve its customers. There's a meaningful difference, he suggested, between risks that require regulatory intervention and those better addressed through supervision—a distinction that matters enormously for how banks can support businesses in practice.

FDIC Chair Travis Hill echoed the calibration concern while defending the value of international coordination. "Having some consistency in the whole playing field of different jurisdictions has value," he said, with a clear caveat: "For us in the United States, we still need to make sure that whatever comes back here works in the United States." Reflecting on the lessons of the 2023 Basel rulemaking process, Hill described the goal as a framework that reflects the real needs of bank customers, draws activity back into the regulated banking sector, and keeps safety and soundness at its core. Getting that balance right, he suggested, is less about ideology than about honest accounting of how banks actually function.

On Capitol Hill, the frustration with regulatory whiplash is bipartisan and increasingly urgent. Rep. French Hill (R-AR), Chairman of the House Financial Services Committee, was direct about what businesses tell him: "Having these hyperbolic see-sawing between D and R administrations is infuriating. You can't make capital investments, you can't train employees." The only durable fix, he argued, is statutory — locking in reforms that survive changes in administration rather than leaving them vulnerable to reversal. He pointed to several legislative priorities he sees as genuinely achievable: the INVEST Act, which he called "a very pro-growth, positive bipartisan bill that the Senate, the House, and the President should see enacted into law this year," and the Working Families Tax Cut, which he credited as foundational to the current economic momentum. "If we can do the same for our regulatory priorities," he said, "we are setting up the American economy for the long term."

At the SEC, the emphasis was on getting back to basics. Jim Moloney, Director of the Division of Corporation Finance, was candid about the scale of the task: "As we move forward into the new era—blockchain, tokenization, AI, 24/7 trading markets—those rules need to be updated. This is a house in dire need of a remodel, and it's not a small one." His prescription was a return to fundamental materiality, rules grounded in what investors actually need to know, developed with genuine input from the market. "We actually need the voices from outside," he said. "We need companies, exchanges, market participants, and funds to tell us what is the most material."

SEC Commissioner Peirce connected that regulatory philosophy to something larger. "Having sensible rules and enforcing them judiciously gives people the confidence to participate in the markets that they need," she said. "Investors, companies that use capital, and intermediaries feel comfortable in the U.S. markets because they can trust both that our laws will be enforced as written and that the enforcement will be fair and impartial." Confidence, in her framing, is the precondition for everything else the markets do.

A less-discussed threat to that confidence: the growing role of third-party litigation funding. As Matt Webb of the U.S. Chamber's Institute for Legal Reform put it, "Our court system is not intended to be a capital market, and lawsuits should not be treated as investment vehicles." Allen Kirsh of Zurich U.S. traced the downstream costs: "There are higher insurance premiums, we all pay higher rates... At the end of the day, business pays, but that means we all pay for increased costs for goods and services." When litigation becomes an asset class, the costs don't stay in the courtroom.

Nasdaq's Terry Campbell explored the corporate governance side of the issue. "We made this promise to Americans that their 401(k) is going to be a big part of their retirement," he said. "One of the ways that grows stronger over time is when there are companies that have a faster business growth lifecycle." His message on the broader policy environment was optimistic but clear-eyed: "It's not partisan to make America's capital markets the best they can be."

The debates over Basel calibration, capital formation, SEC rulemaking, litigation reform, and legislative strategy are genuinely complex, but the underlying goal is shared. Smart, stable, well-calibrated policy keeps the engine running. As Commissioner Peirce put it, "The capital markets invite people to cooperate for the improvement of society."

About the author

Mike Flood

Mike Flood is a veteran financial‑services policy and operations executive with nearly three decades of experience across government, industry, and trade associations, now serving as senior vice president at the U.S. Chamber’s Center for Capital Markets Competitiveness.

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