11/19/2010 - When financial reform became law last summer, it marked a victory for the Pew Economic Policy Group, which had worked on behalf of improvements to the nation’s financial regulatory system for more than a year.
The group’s Financial Reform Project commissioned research studies, facilitated debate on key aspects of reform through briefings on Capitol Hill and public programs, polled likely voters on their desire for reform and advocated in key states to encourage lawmakers support for the legislation.
The project’s work earned bipartisan praise from key members of the Senate Banking Committee for its efforts at seeking compromise solutions to advance the legislation.
“What Pew did do was helpful. They put together a pretty broad swath of philosophical backgrounds and smart people to try to hash out many of these issues. They went about it in a very serious way. We sort of stayed in touch with them all the way through,” said Senator Bob Corker (R-TN).
Senator Mark Warner (D-VA) agreed, saying that the project helped “because it has brought people from different ends of the ideological spectrum.”
Only months into the global financial crisis, in May 2009, Pew launched the project with the goal of injecting objective, fact-based economic analysis into the debates about financial markets regulatory reform. It had four main objectives for the legislation:
- Create an early warning system that detects problems before they can hurt American households.
- End the idea that some financial companies are “too big to fail” and bailouts that put taxpayers at risk.
- Increase transparency in markets to safeguard American families and ensure financial firms act responsibly.
- Protect consumers from harmful business practices.
In March 2010, the project released the results of a poll
that confirmed many Americans desired real reform. The poll revealed that 74 percent of likely voters believed that there was a 50-50 chance or better that the United States would experience another financial crisis within three years. It also said that half of voters would view their member of Congress more favorably if reform was enacted.
The poll received widespread media coverage with mentions in Reuters, Kiplinger, Politico and many other outlets.
The project also received news coverage for its spring 2010 release of a research paper
by Georgetown University’s Phillip Swagel, The Cost of the Financial Crisis, which quantified the impact to U.S. households and the government over a period of five quarters. According to the study, the financial crisis and recession cost U.S. households an average of about $100,000 in lost wealth; from June 2008 through March 2009, households’ stock holdings fell $66,000 and real estate dropped $30,000, on average.
In addition to media attention, the report was cited by at least three senators and in the Congressional Record.
As momentum began to build for passage of reform legislation and House and Senate conferees labored on a final bill in early June, the project continued its work. Along with the University of Maryland and the Committee for the Establishment of the National Institute of Finance, the project sponsored a workshop on the importance of reliable data in financial reform. It also held a full-day meeting with several prominent advisors to discuss how to implement the law. Guests included Treasury Deputy Secretary Neal Wolin and Assistant Secretary Michael Barr. That meeting was followed by a reception in the Senate Mansfield Room to thank those who had worked on the legislation.
The House approved final legislation in June and the Senate’s final vote came in July, followed by a White House signing ceremony, where the attendees included director of the Financial Reform Project, Charles Taylor.
While praising the new law, John Morton, then managing director of the Economic Policy Group, noted the work was not over. “Now,” he said, “Congress and the regulators must turn their attention to oversight and implementation to ensure that the next phase of reform receives the same level of attention as the first. The American people deserve nothing less.”Pew is no longer active in this line of work, but for more information, visit the main Pew Financial Reform page.