How can policymakers fix the financial system to reduce the risk of another economic crisis and yet more bailouts? Congress is considering comprehensive new regulations along with a mandatory “resolution” regime for systematically important financial institutions which near insolvency, and access to federal funding to cover the cost. But these steps would make the financial system worse, not better. And while claiming to make financial bailouts a thing of the past, it would actually make them more likely, in effect creating a permanent TARP program. More government regulation and pre-funded bailouts will not fix the system. Instead, the focus should be on establishing an effective bankruptcy system for large financial firms to allow failures to be addressed in the same way failure is addressed in other industries, while improving capital standards.
The burden of regulation on Americans increased at an alarming rate in fiscal year 2010. Based on data from the Government Accountability Office, an unprecedented 43 major new regulations were imposed by Washington. Read More.
Our latest video explains, in its current form, the Financial Regulation bill can better be described as a Wall Street Bailout bill. Read More.
Do consumers need a new regulatory agency to protect them in the financial marketplace? The question has been at the center of the ongoing congressional debate over financial services reform. Read More.
The Obama Administration's proposal for financial regulatory reform would give government regulators almost unlimited powers to take over financial institutions. The better choice would be to amend U.S. bankruptcy law. Read More.
Here are all the blog posts from The Heritage Foundation on financial markets. Read More.
Within hours of Richard Cordray assuming the role of director[1] at the Consumer Financial Protection Bureau (CFPB), agency officials began exercising their newly expanded powers. Their immediate target is all manner of “nonbank”[2] financial services used by millions of households. While proponents contend that the new… Read more
The Congressional Budget Office (CBO) warns that a tax on certain financial transactions could “diminish the importance of the United States as a major financial market” and that, in the short run, “imposing the transaction tax would probably reduce output and employment.”[1] While these effects would be “mitigated”… Read more
Congress passed a combined spending proposal (H.R. 2112) that includes an increase in the limits on mortgages held by the Federal Housing Administration (FHA), though Fannie Mae and Freddie Mac are left untouched. A forthcoming study by The Heritage Foundation demonstrates how federal intervention in the… Read more
In one spectacularly misguided move, a House–Senate conference committee has taken a step that will expand the federal presence in the housing markets, preserve Fannie Mae and Freddie Mac, and damage the near-bankrupt Federal Housing Administration (FHA) in the name of helping the housing sector to recover. One small provision… Read more
My name is Ronald. D. Utt. I am the Herbert and Joyce Morgan Senior Research Fellow at The Heritage Foundation. The views I express in this testimony are my own, and should not be construed as representing any official position of The Heritage Foundation. Until recently, federal… Read more
Abstract: Congress enacted the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010 in the wake of a financial crisis followed by a serious economic recession. Regrettably, many of the provisions of the Dodd–Frank Act contravene basic American principles and inhibit rather than… Read more
From The Heritage Foundation, I'm Ernest Istook. … Read more
Americans need jobs. The private sector of the American economy will create jobs when government removes the obstacles it has placed in the way of job creation and when the demand for goods and services rises. The government should promptly review the vast increase in government regulation of the economy… Read more
In response to the credit downgrade by Standard & Poor’s in August, the grim reports on the state of the economy, and the collapse of the stock and financial markets in the week after the downgrade, President Barack Obama has re-engaged with the issue of America’s faltering economy and the… Read more
Late on Friday, August 5, Standard & Poor’s (S&P) downgraded the United States credit rating from AAA, and really best in class, to AA+. In one fell swoop, S&P sent two separate and powerful messages. First, as The Heritage Foundation and many others warned, the spending reductions in the deal… Read more
The collapse of the subprime mortgage market in late 2006 set in motion a chain reaction of economic and financial adversity that has spread to global financial markets, created depression-like conditions in the housing market, and pushed the U.S. economy to the brink of recession. In response, many in Congress and the executive branch have… Read more
The housing market is still weak,[1] and federal regulators are considering a regulation that could make matters even worse. Known as the Qualified Residential Mortgage (QRM) rule, the draft rule could have the effect of requiring many home buyers to have at least a 20 percent down payment… Read more
Abstract: Do consumers need a new regulatory agency to protect them in the financial marketplace? The question has been at the center of the ongoing congressional debate over financial services reform. But… Read more
In an important victory for free enterprise, a unanimous panel of the U.S. Court of Appeals for the D.C. Circuit has struck down the regulatory hijacking of corporate board elections. Authorized by the Dodd–Frank statute, the so-called proxy access rule crafted by the Securities and Exchange Commission (SEC) was deemed… Read more
Abstract: As the new Congress assembles, many legislators are considering how to lessen the regulatory burden on Americans. President Obama, too, now says that he wants to root out unnecessary government rules. With regulatory costs at record levels, relief is sorely needed. But it… Read more
Today marks the one-year anniversary of the Dodd–Frank Wall Street Reform and Consumer Protection Act. It comes in at some 2,300 pages, so it should surprise no one that dozens of regulatory deadlines have been missed, and a multitude of agencies are months behind in their rulemaking schedule. It is… Read more
After more than a year of delay, the House Financial Services Committee is finally starting work on legislation that...… Read more
Given the task of producing a plan to develop a new housing finance system after the crisis of 2008 and the failure of...… Read more
The release of the final report(s) of the Financial Crisis Inquiry Commission (FCIC) brings to mind the story of...… Read more
When the Dodd-Frank financial-overhaul bill was passed last summer, it was done so with much of the fanfare and...… Read more
The Wall Street Journal reports today: Banks are considering additional fees on credit cards and checking accounts. But...… Read more
As President Obama today signed into law the Dodd-Frank financial regulation bill, two words were left unspoken: Fannie...… Read more
The President is scheduled to sign the financial overhaul bill today, yet he might want to pause a moment to consider...… Read more
Without spending a single dime, the Obama administration did more yesterday to create jobs for the U.S. economy than it...… Read more
After the last-second addition of another $20 billion in new taxes shattered their original coalition for passage, the...… Read more
Following the release of the 2,000-page Dodd-Frank financial regulation bill last Friday, fixed-income portfolio manager...… Read more
Norman B. Ture Senior Fellow in the Economics of Fiscal Policy
Senior Research Fellow in Retirement Security and Financial Institutions