Senior Chair Rodge Cohen appeared on Bloomberg TV’s Wall Street Week to discuss financial institution regulation. Asked about recent reports that the Financial Stability Oversight Council was considering regulation of non-bank financial institutions under Dodd-Frank, he emphasized the need for caution.
Rodge said that when considering whether to regulate major asset management firms, regulators should be careful to avoid upsetting the advances that index funds have made to enable individuals, small businesses and charitable organizations to invest at low cost. Regulations that would frustrate those principles would damage the economy, he said.
Rodge suggested that, before imposing regulations, regulators should first require the institutions to provide more information, and said careful study was then needed before deciding what the regulatory structure, if any, should be. He also noted that each financial crisis requires a specific response. Exogenous events in 2020 linked to the COVID-19 pandemic required a different regulatory approach than that used in the financial crisis of 2008.
He ended by noting that given the “incredible amalgam” of proposed regulation in the banking sector, “Looking at this holistically is really critical.”
Watch the conversation on Wall Street Week.
Subscribe to stay current on S&C Insights.
Sending an e-mail through this web site does not create an attorney-client relationship. You should not send us any information through this web site that you would want treated confidentially.