Concern over Expenses Associated with Dodd-Frank Continues to Hinder Job Creation in Financial Markets
The expected cost of new regulations being implemented from financial reform was cited at the SIFMA Dodd-Frank impact Analysis conference as one reason banks are reluctant create new jobs.
"There's a capital strike going on in corporate America," said Larry Kudlow, economist and host of the CNBC program, "The Kudlow Report." Speaking at the conference, Kudlow went on to say banks are "afraid to take the risk of hiring until they know how much that hire is going to cost them as well as how much the new rules are going to cost them."
With more than 300 new financial regulations impacting the way the financial services sector does business, that cost could be considerable.
Kudlow recalled what life was like under President Reagan, when Kudlow was an economist in the Office of Management and Budget and reminded the audience that Washington hasn't had a budget in three years. Under Reagan there was considerably less regulation and the economy was stronger. In answer to a question from the audience, Kudlow also said he thought there could be a government shutdown if the debt ceiling crisis isn't resolved but he doubted the U.S. would default on its debt.
While the theme of stymied growth in job creation carried through many of the panels throughout the day, there were a few notable exceptions. Lee Olesky, CEO and Co-founder of Tradeweb, said his firm was "looking for qualified people who could help them deal with the new regulations that will change the way OTC derivatives are traded."
Edward Pinto, Resident Fellow at the American Enterprise Institute for Public Policy Research said he expected further consolidation in the mortgage finance area.
