Report: Corporate finance chiefs stifled by regulation

More than 75 percent of corporate finance chiefs say federal regulation is stifling access to services, according to a report released Thursday by the U.S. Chamber of Commerce.

The pro-business group’s Center for Capital Markets Competitiveness surveyed more than 300 corporate treasurers with an online questionnaire. The size of businesses represented ranged roughly from $100,000 to $100 million in annual revenues.

More than 30 percent of treasurers surveyed said “dealing with uncertainty over new financial regulations” was their biggest financial concern for the year ahead.

ADVERTISEMENT
“The crush of financial regulations has a direct, downstream impact on companies,” said Center CEO David Hirschmann. “It’s time for regulators to take stock of this impact and ensure financial regulation doesn’t further limit America’s Main Street economic growth.”

Treasurers were concerned that federal regulations ramped up costs and cut off access to important services and capital needed for daily functions, said Sparky Zivin, who led the survey.

Basel III banking reforms, meant to limit excessive debt and bolster financial security, was cited as the most negative regulation by the companies. 

Others regulations deemed negative by the treasurers included rules placed on systemically important financial institutions — SIFI, often called “too big to fail” — Securities and Exchange Commission money market reforms and the Volcker Rule limiting high-risk investments.

“They’re now being forced to pass this on to their customers, their investment strategies and their employees,” said Zivin, a partner at Brunswick Group, a multinational consulting firm.  

“This is no longer just affecting the balance sheet,” he said.

Increased bank capital charges was the most common concern among the treasurers. Half of those surveyed said increased fees were the costliest challenges for their companies.

Just more than 25 percent also cited derivatives regulations, changes to money market mutual funds and an inability to hold cash deposits.