>The President is right that reform of our failed regulatory structure is needed. However it is hard to see how creating more regulators will solve the fundamental problem of a broken regulatory system. The President’s plan fails to address the fundamental cause of the problem: banks were able to take on too much risk because of the widespread belief that the US government would bail them out if they failed. In fact the President’s plan runs the risk of sending the message to the market that the US government will continue to rescue “too big to fail” companies. This is precisely the opposite of what we should be doing: we should make it clear that no business, no matter how big or connected, is implicitly backed by US taxpayers. The purpose of the banking sector is to help Americans obtain credit to start small businesses, own our own homes and achieve financial security. It is not clear how this plan furthers that goal.
I appreciate the president’s invitation to the White House on Wednesday and I look forward to the opportunity to share with him the ideas on which the Republicans on the Financial Services Committee have been working. At the core of our plan is a promise to the American taxpayer: no more bailouts. It’s time to reject the “too big to fail” logic that has resulted in unprecedented government intrusion into the marketplace and reinstate the free market principles that are the cornerstone of our nation and a healthy financial sector.
Sincerely,
Scott Garrett
Member of Congress
