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Former SEC Chairman Richard Breeden on the state of the financial sector and the impact of government regulations and regulators on banks and the econ...
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Says that banks aren't what we should be worried about right now the government is former SEC.
Chairman Richard -- -- a Washington's meddling is what could bring this economy -- was good to see you.
Omnimax excellent exact I've always -- -- -- -- met on -- -- Natalie Natalie but you arguing that it's having a direct.
Negative correlation.
Well I think first volley of the -- and risk to some of the banks is a little bit old news -- the hangover from.
The problems we had in -- and -- on and I think fundamentally the banks will.
Be fixed by both the steps they've taken themselves and a stronger economy which is good for banks and you see their shares.
Beginning to reflect that.
Think the thing I worry about is so -- we have this continuing uncertainty.
Over the long run course of the government's fiscal posture and Washington has continued.
-- -- -- -- we're no closer to a Simpson Bowles or any other warm had -- opera guys.
Then then we were and meanwhile the debt mounts the debt -- and and that's a risk to the long run economy were working hard to get everything going well.
Markets reflecting that but we haven't solve those longer term issues army.
-- threat of another meltdown imminent threat.
I don't think any imminent threat of the kind of meltdown we saw because banks have higher capital levels the man people are.
We can and we don't have the exposure to the housing bubble.
That existed now at a rapid to drag on that there's stingy as ever -- lending money.
Gas and and that's true but that's part of the healing process so I can credibly we penalize them when they were aggressively lending -- -- they can't win for -- money and right.
But I think the when you look at what's gone on in Europe.
That was a big threat.
And the European the steps the Europeans -- taken have been fairly successful.
To buy themselves time to cure what is a longer term more fundamental problem the Euro structure.
That was the one thing that could have had an impact I don't think we would have seen a repeat of 08.
Because our banks are fundamentally much stronger shape and they were a few years ago.
But that was the one thing that had them the ability to be an enormous systemic impact.
Again -- that I think we're in pretty decent shape doesn't mean that there aren't.
Issues that individual institutions won't have problems but the system as a whole is much stronger.
As a former SEC -- the argument has been in this administration that we need more cops there.
This consumer protection agency -- they're calling.
Lot more cops you've been a big -- we need to smarter cops on but we're gonna get a lot more cups.
Is that gonna do the trick is that gonna make this investment environment any safer anymore protected.
I think you at some point you get to a point where more cops are counterproductive.
Particularly when it's more different agencies.
Frankly if they're needed to be more consumer protection and enhancing.
The resources of the existing agencies would have made more sense.
Then setting up a new agency to duplicate some of what other agencies authority doing in my judgment.
-- the regulation is important but it has to be kept in balance with economic growth -- that we have and everyone competed with one another funding they're gonna overlap.
Jurisdiction aren't that has been a long standing from the federal government.
Not one that -- years from now we can be talking about that same issue.
Government that will have more agencies targets well that's been the history and that what do you think it is registered one nominated one it.
Well -- be good good discipline.
Same issue of when within agencies when you.
Right one regulations shouldn't -- take.
Another one off -- -- recent releases of some offsetting some regulatory costs are are very real drag on the economy when I look back to the twenty years.
That have gone by since I was at the -- SEC it's been that long it's been a long time flies when you're -- -- right now but the aggregate not just of the SEC but it only agencies -- is a much bigger drag than it used to be on the economy.
Twenty years I know -- -- it doesn't have regular battles going on Richard Breeden thank you very very much.
