07/26/2012 04:56 pm ET Updated Jul 26, 2012

Mitt Romney: Banking Regulation Is Essential To The Functioning Of Markets

Mitt Romney, in the middle of a trip to London that is being overshadowed by verbal gaffes on his part, made some unusual comments about financial regulation to a group of supporters at a fundraiser in Great Britain's capital.

Romney, the presumptive Republican presidential nominee, told a crowd full of bankers that the GOP has erred in the past in the way it has spoken about regulating Wall Street and the financial sector.

“There’s no question but that regulations are essential to the functioning of markets. We have in our party, I think, on occasion misspoken by just saying we’re for deregulation -- to some that means we want to get rid of all regulation," Romney said. "That’s not true. Of course you have to have laws and regulations to make free markets able to produce and to be effective."

"But you have to make the regulations modern and up to date. And when you find in some cases they have been counterproductive, you get rid of them. Change them. Bring in new ones," he added.

Romney was speaking to a group of U.S. citizens who live or work overseas, and they were required to show their U.S. passport at the door. A campaign official told reporters at the event that they expected to raise $2 million from the fundraiser.

Romney, by engaging in a critique of his own party -- which he does not often do -- may have been responding to a talking point often found in President Barack Obama's campaign stump speech. The president often accuses Romney, who wants to get rid of the recently passed Dodd-Frank financial regulation law, of wanting to essentially get rid of all regulations.

"They believe if you tear down all the regulations that we’ve put in place -- for example, on Wall Street banks or on insurance companies or on credit card companies or on polluters -- that somehow the economy is going to do much, much better," Obama said earlier this month at a campaign rally in Roanoke, Va.

Romney said in London that he believes Dodd-Frank is "overwhelmingly burdensome."

"I don’t believe it’s having a major impact on the so-called money center banks that would make them uncompetitive. The money center banks have become larger. Community banks, however, are having a harder time. Dealing with all the new regulatory burden has caused a lot of community banks to pull back," Romney said. "At the very time we’d like them to step forward and provide financing to small business."

Romney, who has also been criticized for not giving specifics about what he would do if elected, outlined two portions of the Dodd-Frank bill that he would like to keep.

"I’d like to get rid of Dodd-Frank and go back and look at regulation piece by piece," he said. "I recognize, for instance, we do need to have greater transparency in the trading of derivatives, so we know what’s going on -– what kind of exposures various institutions have. I also believe there need to be capital requirements for banking institutions so that people don’t go out and leverage themselves to the point where any small hiccup could cause the entire institution to fail."