WASHINGTON – A study authored by former Congressional Budget Office Director Douglas Holz-Eakin and released today by the American Action Forum found that the Dodd-Frank law could reduce U.S. economic growth by $895 billion over the next ten years by imposing costly burdens on the banking sector.
In response, William Moore, the Executive Director of the Regional Bank Coalition issued the following statement:
“This study confirms what regional banks already know from experience: there are real, significant costs to the American economy as a result of Dodd-Frank. As Congress considers adjustments to Dodd-Frank, it will be important to balance the costs and benefits of the law on all banks, particularly the regional banks caught within the $50 billion arbitrary threshold for designating banks as systemically important. As reported in a study from the Treasury Department’s Office of Financial Research, regional banks pose no systemic threat to the economy. While it is important that Congress maintain regulations that ensure safety and soundness of the financial system, it makes no sense to impose costly economic burdens on banks that we know pose no systemic risk.
“This study demonstrates that if Congress would implement a more appropriately tiered to risk regulatory structure, regional banks would be able to do more of what we do best: invest in local communities to help grow good jobs with good wages.”
About the Regional Bank Coalition: The Regional Bank Coalition is a group of regional banks that support regulation based on risk and business model to ensure safety and soundness. For more information, visit www.regionalbanks.org or follow on Twitter @rgnlbanks.