Financial Regulatory Reform Puts Capital Formation At Risk

In the U.S., where potential increased regulation threatens to undermine the whole raison d'etre of equity markets: capital formation. The SEC, for its part, has recently opined on short-selling, dark pools, sponsored access, flash orders , requesting comment on virtually every aspect of the last 15 years of equity markets regulation , while Congress is focusing on macro issues such as systemic risk regulation, too-big-to-fail, consumer financial products' protection, executive compensation, derivative regulation, mortgage reform and antipredatory lending, credit agency reform, and hedge fund and private equity registration. Instead of focusing on getting even, we should look at the bigger picture. We need a financial market that creates incentives for capital formation to allow those businesses to invest, build, employ and grow. Many of our current rules and regulations make the formation of capital challenging.