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US Senator calls for Dodd Frank delay

Tuesday 12 April 2011 - by Dave Goodman

A veteran Senator has urged the US government to delay the implementation of the Dodd-Frank Act to prevent placing American financial institutions in an "untenable situation".

Orrin Hatch, the ranking Republican on the Senate Committee on Finance, wrote to Treasury Secretary Timothy Geither on Friday to express concern that the new legislation had been drafted without adequate consideration of the impact it would have on US competitiveness.

Drawing on a report by JP Morgan Chase, which referred to the "potential negative impact the restrictions on market making related activities rules might have on the competitiveness of the US financial services sector," Hatch added that the new regulation, in particular the Volcker Rule, could potentially drive financial activity away from the US.

He wrote: "I have real concerns that a lack of due diligence in the implementation of Dodd-Frank will result in unduly burdensome regulations.

"This will undermine the competitiveness of our domestic financial industry, putting our nation at odds with our trading partners and placing further strain on an already stressed corporate tax structure.

"We are guaranteeing that our financial institutions will be placed in the untenable situation of competing with international institutions whose host countries refuse to be burdened by the same constricting framework which we so readily heaved upon ourselves."

As a result of these issues, the 77-year-old Utah Senator recommended that the regulation proposed in Dodd-Frank should not be instigated until other G20 countries agreed to make similar reforms.

He wrote: "There are significant outstanding issues surrounding global coordination of this regulatory framework.

"I strongly believe that these concerns demand delay of further implementation and rulemaking of Dodd-Frank Act provisions until and unless we receive assurances that international partners agree to adopt similar regulatory reforms."

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