Nason Speaks On US Regulatory Regime

by Mike Godfrey, Tax-News.com, Washington

19 October 2007

David G. Nason, US Treasury Assistant Secretary for Financial Institutions, has spoken before the Exchequer Club about the country's financial regulations.

Mr. Nason began his speech on Wednesday by observing that:

"It has been an especially busy time at the Treasury Department. As you know, there has been an adjustment taking place in the overall credit market and the mortgage market in particular. Largely because of lax underwriting, the mortgage market, especially the subprime market, has been experiencing a high number and percentage of delinquencies and defaults. As a result, subprime mortgage-backed securities have performed poorly. This has led investors to reassess the risk of these securities and as a corollary to reassess their pricing."

Mr. Nason continued: "Capital markets are the lifeblood of the United States economy. They enable capital investments to finance companies, which leads to job creation and economic prosperity. American consumers and investors benefit from a vibrant and healthy financial services sector that provides opportunities to access credit, save and invest for the future, and insure against risks. It is important, therefore, that our capital markets remain the best in the world."

According to the Assistant Secretary for Financial Institutions:

"Examination and reexamination of financial services regulation are essential to fulfilling the Treasury Department's mission to promote the conditions for prosperity and stability in the United States and to encourage prosperity and stability in the rest of the world."

Speaking with regard to planned reforms of the US regulatory regime, Mr Nason stated:

"In preparing a regulatory reform plan, we will assess the current financial services regulatory structure in the United States and make recommendations to modernize oversight to fit demands of the marketplace. We believe that a 21st Century regulatory regime should safeguard the safety and stability of the financial system, maintain high standards of both consumer and investor protection and promote efficient and competitive capital markets."

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