GAO Calls On Congress To Rationalize Financial Regulatory Structure

From: Mondaq

Article by Steven D. Lofchie | Cadwalader, Wickersham & Taft LLP

In its annual report, the Government Accountability Office (“GAO”) encouraged Congress to make legislative changes to the financial regulatory structure in order to improve (i) the efficiency and effectiveness of oversight, (ii) the parity between consumer and investor protections, and (iii) the consistency of financial oversight for similar institutions, products, risks and services. GAO also called on Congress to consider whether aligning the authority of the Financial Stability Oversight Council with its mission to respond to systemic risks necessitates legislative changes.

The GAO report covers a range of governmental functions. Regulation of financial services is discussed on pages 7-8 and, in more detail, at pages 63-71. According to the GAO, “a pattern of inconsistencies and inefficiencies . . . continue[s] to persist because of the fragmented regulatory structure” (at page 65).

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