Last month, 2012 Republican presidential hopeful Mitt Romney indicated that he is open to repealing at least large swathes of the Dodd-Frank financial reform law, even as the country is still recovering from the effects of the 2008 financial crisis. “The level of over-regulation and burden which has been placed on the financial services sector I think is unnecessary and will cost us jobs down the road,” Romney said.
Upping his attack on financial reform, Romney said yesterday that bank regulators are akin to “gargoyles,” looming over banks and scaring them into not making loans:
Romney said the Democratic-led overhaul has created “uncertainty” that paralyzes Main Street. “Banks are afraid to make loans right now because of the government hanging over them like gargoyles,” Romney, a former Massachusetts governor and business executive, said during the roundtable discussion…“Almost everything the president did had the opposite effect of what was intended,” Romney said. “He said, okay, we’re not going to re-regulate the banking sector. Well, what he caused was the banking sector to pull back, and that’s the very sector that’s got to step forward to help get the economy on its feet again.”
Romney has previously defended Wall Street from criticism, saying that those pushing for stricter regulation were acting “as if Wall Street greed is something new.’’ Late last month, Romney delivered a speech in New York in an attempt “to woo Wall Street donors,” which netted him $1 million.
Contrary to Romney’s assertions, bank profits are booming: Banks made $29 billion in the first quarter of this year, “a 66.5 percent increase from the same period last year and the best quarterly performance since the second quarter of 2007.” And according to the Federal Reserve’s Survey of Senior Loan Officers, “for the last year or so, standards on loans to small firms have been easing.” The problem is that there is still little demand in the economy, so businesses have no customers and aren’t expanding. Banks are also hesitant to lend when the economic recovery is so sluggish
Republicans in Congress have made their contempt for bank regulators well known, gutting their budgets even as the regulators seek to implement the Dodd-Frank law. And it seems Romney is willing to play the same game, acting like the financial crisis simply didn’t occur.