US financial regulators pressed for quicker reforms
US senators pressed regulators on Tuesday to speed up implementation of financial service industry reforms aimed at reducing risks from transactions like derivatives swaps that contributed to the 2007 financial crisis.
Mary Jo White, head of the Securities and Exchange Commission, which is charged with regulating US markets and securities, told the Senate Banking Committee she hoped to roll out many rules that protect investors and consumers this year.
"I have several things on front burners," said White, a former high-profile prosecutor who was confirmed as President Barack Obama's SEC chief in April.
"I think we've made very good progress. We're continuing to push extremely hard to complete those rulemakings."
The SEC is overseeing implementation of dozens of new regulations laid out in the Dodd-Frank Wall Street Reform Act of 2010, which sought to tighten regulations on broad sections of the financial services industry in the aftermath of the financial crisis.
Among them are the much-anticipated regulations on the so-called Volcker Rule, a segment of Dodd-Frank aimed at keeping banks from speculative trades in their own accounts, a tactic that led to the worst financial downturn since the Great Depression.
Asked specifically about a time line for the Volcker rulemaking, White said, "that may be completed by year-end."
Also under final crafting are new rules on the application of Dodd-Frank to cross-border, security-based swap transactions.
But White said the SEC was short-staffed, and two new two new commissioners were just taking up their posts on the five-member body.
"I'm not saying every single one will be done by year-end," she said of the various reforms, which include regulations on small business filing requirements, the relatively new practice of crowdfunding, and disclosures of chief executive salaries.
"Having just passed Dodd-Frank's third anniversary, there is still considerable work to be done," Senator Michael Crapo, the committee's top Republican, told the hearing.
Gary Gensler, chairman of the Commodity Futures Trading Commission which oversees the complex environment of swap deals, testified along with White.
While Gensler said the CFTC has "not shied away from bringing cases against large banks" that break the rules, he and White bemoaned the comparatively low level of funding for their agencies.
"I would say our enforcement resources are tiny compared to the size of the markets," Gensler said.
"The American public put $180 billion into AIG," he said, referring to the 2008 bailout of the insurance giant.
"That's 600 times what the president asked for funding for our agency."