Goldman, Sachs, of course. Risk has the information here.
Why does this matter? Because, as I said a year ago when Dodd-Frank was passed, the statute is long, costly, needlessly complex and punts the bulk of meaningful issues to regulators. Those regulators are now beginning to fill in the substantial gaps and ambiguities left by Dodd-Frank, and are doing so outside of the temporary public glare that – thanks largely to anger over the bank bailouts -- accompanied the legislative process.
To be clear, I’m not suggesting that the CFTC, or any other agency, should engage in the substantial rulemaking required by Dodd-Frank without information and input from industry. I shudder to imagine the utter silliness of financial regulation under such conditions. Rather, this is a broader argument, and one that I’ve made before in other contexts, about Congressional accountability and second chances for industry capture in a less transparent setting.
According to the Risk analysis of CFTC meeting logs, Goldman Sachs has been the most active meeting participant, meeting with CFTC officials 52 times, followed by Morgan Stanley, with 32 meetings, and Barclays Capital, with 25. Delta Strategy Group had the most of the trade association/lobbyist meetings, with 42, followed by ISDA at 22, and MFA at 20. Law firms representing derivatives market participant clients are dominated by Skadden, with 23 meetings, Winston & Strawn, with 23, and Sullivan & Cromwell, with 19. Clearing houses, trading platforms, exchanges, trade repositories, asset managers, and hedge funds are also well represented in terms of frequency of CFTC meetings.
According to Risk:
In terms of subjects discussed, the most popular by far was the definitions within the Dodd-Frank Act – specifically, how regulators will categorise swap dealers and major swap participants. Approximately one fifth of all meetings – 190 in total – were spent either entirely or partly discussing how the CFTC will determine which firms will be obliged to centrally clear swap transactions and which will be exempt from the requirements.
My RAs and I have been doing a similar analysis on the Volcker Rule for all federal agencies with rulemaking authority under Volcker that also includes a content analysis of the far more numerous public comment letters. I’m planning to have a rough cut of the numbers ready to share with you for the upcoming one-year Dodd-Frank anniversary, on July 21.
For now, though, I’ll just say that our analysis paints a similar picture of industry representation in the rulemaking process and progressively less public involvement in and attention to the Volcker Rule as the action moved from the legislature, to the initial call for public comments, to the more in-depth face time with regulators. Despite initial indications that the public interest in bank risk-taking survived into the crucial regulatory rule-making phase, a closer look reveals that these impressions are misleading. Contrary to first impressions, the Volcker rule did not galvanize the public into an involvement in the gap-filling process, despite commendable efforts from several public interest groups.
I’ll be back with the details in a few short weeks.
Thanks Kim. Very interesting especially when one teams this up with campaign contribution analysis.
Posted by: Bill Turnier | July 04, 2011 at 09:17 AM
Thanks, Bill!
Posted by: Kim Krawiec | July 04, 2011 at 11:34 AM