Author: Brooksley Born and William Donaldson
3/10/2013 —Washington has been abuzz with the automatic, across-the-board spending cuts taking effect, known as the sequester. While many have been focused on the impact on education, law enforcement and transportation safety, another important area that deserves attention is the impact on our financial market regulators: the Securities and Exchange Commission and the Commodity Futures Trading Commission. It is both wrong and dangerous to impose funding cuts on these agencies. They are already underfunded in light of their enormous new responsibilities under the Dodd-Frank Act.
The Systemic Risk Council believes that the SEC and CFTC need a robust — and dependable — source of funding. Unlike every other financial regulatory agency, the SEC and CFTC must rely on Congress for their annual funding. Other federal financial regulators (including the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and even the new Consumer Financial Protection Bureau) do not have to rely on an unpredictable congressional appropriations process for their budgets. Other regulators assess fees on industry and use those fees to fund their activities as is appropriate. Taxpayers should not have to pay for the costs of regulation.
Read the full article, Self-funding of regulators would help fiscal mess, on the Politico website.