In this report, FedFin parses the GOP platform for policy statements that will guide action by a Romney Administration should voters endorse one in November. Typical in such documents, the platform is long on rhetoric and short on substance. It does, however, take an unusually specific stand on housing finance, calling for changes in the FHA and a “wind down” (not shut down) for Fannie Mae and Freddie Mac. Consistent with recent statements from Gov. Romney, the platform is premised on the view that large banks remain too big to fail (TBTF), but there is no discussion of what should be done to end this beyond repeal of Dodd-Frank and various other rhetorical actions. However, Gov. Romney has indicated that he believes systemic designation under Dodd-Frank confers TBTF status in tandem with the orderly-liquidation authority (seen as a TBTF safety net by many Republicans). Consistent with statements from GOP lawmakers like Sen. Shelby (R-AL), the platform urges strong capitalization for banks but it does not link capital to size or the pending Basel rules, omitting any discussion of a surcharge in favor of general language speaking to the benefits of small banks. The platform also calls for FRB reform, taking a milder tone on several points than pushed by Rep. Paul (R-TX) and for privatization of student lending. FedFin will provide clients with an analysis of the Democratic platform once finalized next week in Charlotte.
The full report is available to retainer clients. To find out how you can sign up for the service, click here