Financial Services Roundtable Calls for Principles-Based Regulation

The Financial Services Roundtable has added to the drumbeat for principles-based regulation in a blueprint for reform recommending that Congress mandate guiding principles for US financial regulators. The President’s Working Group on Financial Markets would be given the job of seeing that the regulators implemented the guiding principles.

The guiding principles would not replace regulations. However, once enacted into law, they would become a touchstone against which all existing and new national and state financial regulations would be evaluated in a policy and legal context. Regulations that are inconsistent with the principles would be identified, analyzed, and then revised or
eliminated.

The blueprint envisions six guiding principles. 1) fair treatment for customers and investors; 2) financial regulation should promote competitive and innovative financial markets; 3) the cost and burden of regulation should be proportionate to the benefit; 4) prudential regulation based on a cooperative dialogue promoting best practices; 5) giving financial firms a wide range of options to serve customers; 6) management policies enabling a financial services firm to operate successfully and maintain the trust of consumers.