One of the leading financial industry trade organizations has appointed two former lawmakers to its top executive positions, underscoring the increasing importance of the intersection between Wall Street and Washington.
Former Sen. Judd Gregg, R-N.H., was named chief executive of the Securities Industry and Financial Markets Association today, and Kenneth Bentsen Jr. was appointed president of the organization.
In a press conference this morning, Mr. Gregg said his most important job will be to communicate the importance of strong capital markets to the health of the economy. “We need to make the case to Americans that their prosperity is tied to the strength of the capital markets,” he said. “There's a relationship between the success of a retail businessman in Bozeman, [Montana], and the success of our capital markets. I'm going to bring that message to Main Street.”
Mr. Bentsen, who served as a member of the House from Texas from 1995 to 2003 and sat on the House Financial Services Committee as well as the House Budget Committee, echoed Mr. Gregg's message. “We can't deny the importance of deep and liquid markets,” said Mr. Bentsen, who previously served as SIFMA's executive vice president of public policy and advocacy. He had been serving as SIFMA acting CEO and president since Tim Ryan stepped down from those positions in February. “The economy can't rely solely on our banking system. Our capital markets are the envy of the world.”
Mr. Gregg served in the Senate from 1993 to 2010. As the top-ranking Republican on the Senate Budget Committee, he was a leading proponent of reducing the federal deficit and debt, and reforming entitlement programs. During his Senate tenure, he also served on the banking and labor and education committees. He is currently a co-chair of the bi-partisan Campaign to Fix the Debt organization. Mr. Gregg was a member of the House from 1981 to 1988 and was governor of New Hampshire from 1989 to 1993.
The new SIFMA CEO sounded an optimistic note on the prospects for the economy and dealing with the growing government debt. “We're on the verge of a massive expansion of the economy fueled by our energy industry,” he said. He noted that from a fiscal perspective, tax and entitlement reform were the two key issues needing resolution. “I think we still have an opportunity for compromise.”
On regulatory issues — particularly the implementation of the Dodd Frank legislation — Mr. Gregg suggested caution, as did his predecessor Mr. Ryan. “The ideas [in Dodd-Frank] weren't fleshed out. They were academic and philosophical,” said Mr. Gregg. “The SEC has been deliberate in implementing them and I think it's important we don't rush into positions that have unintended consequences.”
SIFMA has supported the idea of a uniform fiduciary standard for advisers and broker-dealers, but both executives cautioned that any such rule should not restrict consumer access to different advisory models. “The SEC's request for more information from constituencies is a good step. It's critical that we don't take away consumer choice,” said Mr. Bentsen. He also said that the Department of Labor, which is expected to re-propose its own fiduciary standard this year, should abandon the effort. “They should stand down and leave the issue to the SEC,” he said.
Mr. Gregg was succinct in his opinion on the Volcker rule, which would restrict proprietary trading by deposit-taking financial institutions. “Great name; bad rule,” he said. “We shouldn't pursue outcomes that result in less capital and credit being available to Main Street.”