House Agriculture Committee Ranking Member Collin Peterson, D-Minn., charges that Republicans are undermining overseas banking reform with their latest budget cuts, while big banks may be seeking lax regulatory treatment in Europe.
Peterson told House Ag colleagues who helped write part of last year's Dodd-Frank banking reform bill that Republicans are now moving to soften derivatives reforms that could impact ag commodity and input prices. He pointed to ag appropriators and a spending cap adopted in Subcommittee this week for meetings between U.S. and foreign regulators.
"There is a limitation not to exceed $25,000 for expenses for consultations and meetings hosted by the commission with foreign governmental and other regulatory officials," Peterson said. "If we're concerned about getting these regulations in sync why would we put limitation on the commission's ability to meet with these folks? You know this is kind of crazy."
But General Farm Commodities Chair Michael Conaway, R-Texas, argued too much regulation will hurt U.S. agriculture and business if U.S. regulators get too far out in front of European Union reforms.
"An overly narrow or limited approach to end-user exemption by U.S. regulators will increase costs and limit the ability of companies across the country to manage risk," Conaway said. "The question is how will a more flexible approach to the end user exemption in the EU or elsewhear impact the competitive position of U.S. businesses versus their international competitors."
With today's global financial marketplace, Peterson suggests U.S. farmers and businesses may already be losing out as U.S. banks seek more relaxed banking rules overseas.
"Now I'm hearing rumors that some of these big U.S. banks that operate over there as well are telling European regulators that if they will not have as tough of regulations as we have in the U.S. they'll move their business to Europe."
Peterson says Asian exchanges, including those in Singapore, may also be trying to lure U.S. business with more lax regulations.