‘Systemically Significant’ Has Cost-of-Capital Advantage, Frank Says

NU Online News Service, July 11, 4:57 p.m. EDT

Rep. Barney Frank, D-Mass., says large financial institutions such as insurers are running away from being labeled "systemically significant" even though one benefit would likely be a reduced cost of capital.

Frank made his comments in an appearance today at the National Press Club on the one-year anniversary of the Dodd-Frank financial services reform passage.

In other comments on Dodd-Frank today, Frank says Republicans don't really want to repeal the legislation despite talk to the contrary.

"It is interesting that my Republican colleagues, unlike climate change and healthcare, don't want to take this one on head on, because it is still too popular," he says.

But what they are doing is starving the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) of the funding needed to complete work on the rules that implement the law, he claims.

"They're coming at it sideways," says Frank, explaining that Republicans are using concerns about the deficit as an excuse to cut the budgets of agencies like the CFTC and the SEC so that staffs cannot complete work on the regulations.

"The notion that the…$80 or $90 million can't be done for the CFTC because of the deficit…is nonsense," Frank says, adding that it is a tiny sum compared to the costs of the wars in Iraq and Afghanistan.