March 1 (Bloomberg) -- U.S. Treasury Secretary Timothy F. Geithner defended the financial reforms of 2010, saying that while the measures aren’t perfect, they are “worth fighting to preserve.”
“If these reforms had been in place a decade ago, then the rise in debt and leverage would have been less dangerous, consumers would not have been nearly as vulnerable to predation and abuse, and the government would have been able to limit the damage that a financial crisis could have on the broader economy,” Geithner wrote in an op-ed published in the Wall Street Journal.
The financial industry has resisted the overhaul. The Dodd-Frank act’s ban on proprietary trading, known as the Volcker rule, has resulted in more than 17,000 comment letters, the most of any Dodd-Frank provision and one of the highest for a financial regulation.
Geithner dismissed industry claims that the Dodd-Frank act is too complex, limits risk taking and results in unintended consequences.
“Remember the crisis when you hear complaints about financial reform -- complaints about limits on risk-taking or requirements for transparency and disclosure,” Geithner wrote. “Remember the crisis when you read about the hundreds of millions of dollars now being spent on lobbyists trying to weaken or repeal financial reform.”
In the op-ed, Geithner recounted learning about Bear Stearns Cos.’s plans to file for bankruptcy. He said “some people seem to be suffering from amnesia about how close America came to complete financial collapse under the outdated regulatory system we had before Wall Street reform.”
The Dodd-Frank act largely relies on bank regulators to define the regulations. Of the 225 Dodd-Frank rule making deadlines passed, regulators have missed 158 as of March 1, according to the law firm Davis Polk & Wardwell LLP.
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