Bank regulation has been an issue in the financial sector for the past few years

Question

Bank regulation has been an issue in the financial sector for the past few years and it is now a debating point in the Presidential election for this fall. In broad brush terms President Obama would like to see more regulation, especially in the risk management arena (Read: Chase loses $9 billion here) while Candidate Romney would prefer less regulations on the grounds that this will help create more innovation and more jobs in the economy. Please write this week about which approach you feel would be best for the country at this point in its history and, importantly, why?

Explanation / Answer

OBAMA

Perhaps the issue that will make or break his re-election campaign is the economy and his handling of what many call the Great Recession. Hammered by Republicans who say that he is steering the country in the wrong direction and that his policies haven't worked, Obama made a series of reforms to crack down on Wall Street practices and instituted programs to help small-business owners and consumers. His stimulus plan, which temporarily helped boost the economy, has failed to significantly drop the record-high unemployment rate of 9.1%. Obama, who came into office facing the fiscal crisis, says economic recovery will need years to fully kick in. That's why, his campaign says, he needs to be re-elected.


Romney

On the campaign trail, Romney frequently touts his mix of experience in the public and private sectors. Romney has also expressed support for the "cut, cap and balance" approach to curbing federal deficit spending that has been championed by tea party activists and some conservative lawmakers in Congress.



The Facts
The economy, unemployment, taxes and how to manage the federal government's $14 trillion debt will be leading issues in the 2012 campaign. With the near-collapse of the U.S. banking and financial system hitting late in the 2008 race, and the nosedive in employment levels, President Obama's tenure in the Oval Office has been defined, in many ways, by the economy and the worst recession in a lifetime. Republicans, led by the tea party movement -- the conservative wing of the Republican party -- have been hammering Obama's economic and fiscal policy since 2009, pushing GOP candidates to hold firm on pledges not to raise taxes and to cut spending. But headed toward the so-called fiscal cliff –when several rounds of tax cuts expire at the end of 2012, resulting in a half trillion dollars in budget cuts and tax hikes that could push the U.S. into another recession – Congress and the president are poised for another fight. Obama is seeking to extend the Bush tax cuts for those making under $250,000, but has said repeatedly he is committed to ending the tax cuts for the wealthy. Congressional Republicans may be forced to compromise on a number of the measures up for vote headed into the election if they want to extend any of the cuts. These fights are about to come in front of a Congress that has yet to pass a budget for 2012.

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