Chart of the day, Dodd-Frank delay edition
That’s 28 missed deadlines to date, when it comes to new rules required in Dodd-Frank, with the big spike coming right up in the third quarter. The trend is clear: while the early deadlines were hit, later ones tend to get missed. My prediction is that the overwhelming majority of those 109 rules due in the third quarter are going to be missed rather than finalized.
There’s an apocalyptic reading here, which is helpfully provided by a former CFTC official:
“There’s an attempt to kill this through delay,” said Michael Greenberger, a law professor at the University of Maryland and a former official at the Commodity Futures Trading Commission, which is in charge of writing batches of the rules. “The difference between eight or nine months and 24 months could be cataclysmic here.”
And then there’s a slightly more bank-friendly reading:
“For us, it’s a question of figuring out the legitimate interests of folks who say, ‘Wait a minute, slow down’ because they really want us to get it right, and some of them who really have an ulterior motive of just running the clock out,” said Bart Chilton, one of the three Democratic commissioners of the commodities futures trading agency, which is overseeing most rule-writing for derivatives. “It’s going a lot slower than I had envisioned.”
But what’s undeniable is that the banks have worked out that attacking Dodd-Frank in its implementation phase is proving much more fruitful than their attempts to attack it when the legislation was actually being put together. This is par for the course, when it comes to regulation: no matter how sharp legislators make a regulator’s teeth, the industry being regulated tends to be able to blunt them in reality.
Will these rules ever be promulgated in the kind of form envisaged in Dodd-Frank? Or will Dodd-Frank turn out to be a Utopian dream? The best we can hope for is the former, with the rules being put into place before the next crisis hits. But I fear the latter’s more likely, at this point. The urgency which underpinned Dodd-Frank has dissipated, and it’s not going to return until it’s too late.