Romney stresses he wants bank regulation, but slams Obama reforms

WASHINGTON Thu Oct 4, 2012 1:17am EDT

President Barack Obama (R) listens as Republican presidential nominee Mitt Romney speaks during the first presidential debate in Denver October 3, 2012. REUTERS/Brian Snyder

President Barack Obama (R) listens as Republican presidential nominee Mitt Romney speaks during the first presidential debate in Denver October 3, 2012.

Credit: Reuters/Brian Snyder

WASHINGTON (Reuters) - Republican Mitt Romney, seeking to counter his image as a billionaire friend of finance, stressed he wanted regulation of banks but blasted President Barack Obama for pursuing excessive reforms that he said were stifling the economy.

Speaking during the first presidential debate on Wednesday, Romney reiterated his pledge to repeal the Dodd-Frank bill, a 2010 law that overhauls the oversight of U.S. finance in response to the worst banking crisis since the Great Depression.

"Regulation is essential. You can't have a free market work without regulation," said Romney, a former Massachusetts governor.

"At the same time, regulation can become excessive, it can become out of date. And what's happened with some of the legislation that's been passed under President Obama's term is you've seen some of the regulation become excessive and it has hurt the economy."

Romney, who made a fortune as a private equity executive buying and selling companies, has pledged to repeal Dodd-Frank. But during Wednesday's debate, he did not offer any details on his idea of a replacement law.

"We are not going to get rid of all regulation," he said. "You have to have regulation and there are some parts of Dodd-Frank that make all the sense in the world. You have to have transparency, leverage limits."

Romney saved some of his toughest criticism for parts of the Dodd-Frank law that critics say make the biggest U.S. banks effectively "too big to fail."

"We have to have regulation on Wall Street, but I would not designate five banks as too big to fail. This is the biggest kiss that's being given to New York banks I have ever seen," said Romney.

"We need to get rid of that provision because it is killing regional and small banks," he said, adding that 122 community banks had closed since the law was passed two years ago.

At least three U.S. states are challenging the constitutionality of the Dodd-Frank law.

Obama hit back at Romney's criticisms.

"The reason we have been in such an enormous economic crisis was prompted by reckless behavior across the board," Obama said.

"The question is does anybody out there think that the big problem we had is that there was too much oversight and regulation of Wall Street? Because if you do, then Governor Romney is your candidate. But that's not what I believe."

(Reporting By Lucia Mutikani; Editing by William Schomberg and Eric Walsh)

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Comments (5)
The most damaging thing about Dodd-Frank so far is the immediate increase in reserve requirements. It shut down lending and that drove a continuing downward spiral in the housing market. Some of those regulations are a good thing at the worst time for them to take effect. The unintended consequence of driving small banks out of business is the worst part of it.

Oct 04, 2012 1:48am EDT  --  Report as abuse
justiceserved wrote:
As a banker I can tell you these regulations were long overdue. They should have also broken up the big banks setting a limit on market share and separated s&l’s and investment banks as had been the standard from the 1930′s to the 1990′s. banks capital reserves needed to go up & cheap money is more prealent now than ever for qualified borrowers. The problem before was many people were not qualified for the loans they took out and this had to be corrected. The housing market appears to be solidifying and beginning to head back up. These are all good things for a stable economy. Romney & the Rep. have said & proven with votes that they are against most Wall Street & bank regs. and this will lead to another collapse if they get their way.

Oct 04, 2012 2:25am EDT  --  Report as abuse
McBob08 wrote:
American regulations have never been “stifling”, nor have they been effective. They’ve always been underdone and totally insufficient. Anyone who tells you that companies can successfully regulate themselves is one taco short of a combination plate.

It’s most certainly not been regulations that have been stifling the economy — the private sector can get away with murder in America! What has been stifling the economy is two things.

1) Lack of government spending. Any expert in economics will tell you that you have to spend your way out of a recession.

2) Lack of regulations forcing businesses to use ethical business practices, rather than using destructive shortcuts like outsourcing. With the economy what it is, I don’t know why there isn’t a regulation requiring all American businesses to have a certain percentage of their work force domestic, rather than overseas.

The freedom of businesses to farm out work to cheap overseas locations where there’s no workers’ rights or minimum wage is something that should be a huge issue to the American people. Whatever happened to the pride of “Made in America”?

No, Romney’s “Zingers” were off-topic and foster the delusional view of the world that the Corporations have invested big bucks to push in the American Conservative Media. Romney’s ideas will only help the rich, and will actually harm the Middle Class and the Poor. in fact, Romney’s entire performance in the debate was just one long Class Attack against the Middle Class.

Oct 04, 2012 3:19am EDT  --  Report as abuse
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