January 25, 2011
On Wednesday, Jan. 26, 2011, HLS Professor Hal Scott testified before the US House of Representatives Committee on Financial Services in a hearing entitled “Promoting Economic Recovery and Job Creation: The Road Forward.” The entire hearing was webcast live on the Committee’s website.
In his testimony (PDF), Scott, who is the president and director of the Committee on Capital Markets Regulation, focused on the process of the regulatory implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
His recommendations for Dodd-Frank Regulatory Implementation are:
1. Congress should urge the President to require OMB to comment on the adequacy of cost-benefit analysis of the independent financial agencies in promulgating new rules, e.g., the CFTC, FDIC, Federal Reserve, and SEC. Congress should require by statute that all these agencies engage in cost-benefit analysis.
2. Congress should encourage the financial agencies to report on progress toward meeting statutory deadlines and permit the missing of deadlines if truly justified.
3. Congress should encourage the financial agencies to make proposed and issued rules available to the public promptly.
4. Congress should give the financial agencies the resources they legitimately need to implement Dodd-Frank.
Scott's most recent publications include "International Finance: Transactions, Policy and Regulation" (17th ed. Foundation Press 2010) and "The Global Financial Crisis" (Foundation Press 2009).
Immediately following the hearings, The Wall Street Journal reported on Scott's testimony, "Harvard Professor Warns of Cutting Regulators’ Budgets," on their "Real Time Economics" blog.