Larry Summers on regulatory discretion in FinReg

My friends in the business community sometimes like to try to have it both ways. They're for standards, for clear standards, but then if they don't like the standards, they're for regulatory discretion in a lot of areas, the Volcker Rule for example. It was business that was working very hard to get regulatory discretion and to avoid detailed statutory mandates.

So, I think it's a little rich for them to complain that there is now a certain amount of regulatory discretion.

Look, there's things Congress should not do. Congress doesn't know the details of the circumstances of an individual financial institution, those are enormously technical areas. So there needs to be discretion; discretion circumscribed by a framework; a framework that rules out the prospect of a taxpayer bailout; a framework that provides for resolution authority; a framework that insists that things that can be put on clearinghouses and exchanges be put on clearinghouses and exchanges; a framework that insists that every systemic institution, if you're big enough to bring down the system, you're big enough for someone to regulate you comprehensively.

~ Larry Summers, director, National Economic Council, CNBC's Closing Bell, July 21st, 2010