Summary: Key to a vibrant and increasingly productive economy is an efficient credit allocation process -- the mechanism by which all forms of credit, and not just bank loans, flow to those who can make the best use of that credit. Do government regulations influence and therefore distort – intentionally or not – the allocation of credit within the U.S. economy? -- Bank capital and liquidity standards, consumer lending requirements, lending rules enforced by the Consumer Bureau, the Community Reinvestment Act, and government-sponsored enterprises (notably Fannie Mae, Freddie Mac, and the Farm Credit System) among other federal programs steer credit to favorites based on government priorities. Designating large financial firms as “systemically important financial institutions” might diminish their role as independent credit providers and subject them to further government direction. Some argue that Federal Reserve monetary policy, which greatly influences all interest rates, has consequent credit-allocation effects. Where did this all come from, where is it going, and what it means for the future of the economy will be questions for the panel. -- The Federalist Society's Corporations, Securities & Financial Services & E-Commerce Practice Group presented this panel on "Credit to Cronies: Government’s Heavy—IF Hidden—Hand" on Friday, November 14, during the 2014 National Lawyers Convention. -- Featuring: Mr. Edward J. DeMarco, Senior Fellow-in-Residence, Milken Institute; Mr. Bert Ely, Principal, Ely & Company, Inc.; and Dr. Paul H. Kupiec, Resident Scholar, American Enterprise Institute. Moderator: Hon. Paul S. Atkins, Patomak Global Partners LLC; former Commissioner, U.S Securities & Exchange. Introduction: Hon. Wayne A. Abernathy, Executive VP for Financial Institutions Policy and Regulatory Affairs, American Bankers Association; and Chairman, Financial Services & E-Commerce Practice Group.
