I’m having a hard time deciding which I despise more: (1) Congress and the President for enacting such flawed legislation; or (2) the regulators for failing to do what they were required to do by that legislation. Part of me wants to say, “You tell ‘em regulators…they gave you an impossible task, too little funding and somehow expected you to acheive the impossible.” Another part of me, however, cannot help but want to climb atop a large soapbox and shout, “hey regulators, you have wasted vast amounts of time focusing on the wrong things, ignored the things you were required to focus on, but because you’re the regulators and the damn law was so flawed to begin with no one is calling you out on the fact that you have basically dropped the ball in what is rather a pathetic fashion.”
I suppose both perspectives have elements of truth, but I was particularly flabbergasted to see the WSJ report: “Mr. Gensler said the commission won’t take up rules related to margin and capital until next year. Rules for trading platforms being created for this newly regulated market aren’t likely to come up until 2012, either, Mr. Gensler said. The commission also isn’t likely to determine which types of derivatives will be required to be cleared until the end of the first quarter or the beginning of the second quarter of next year.” I’m surprised by this because it is the first time the CFTC has actually provided specific details of how the timing for these rules is likely to unfold. I’m also surprised that this is the same Gary Gensler who claimed in an OpEd piece recently that the public will remain unprotected until all of the Dodd-Frank rulemaking is completed (see my prior post on the subject). So, this guy has basically gone from thumping his chest and rushing into making all kinds of bad decisons about rules to now, at the eleventh hour, saying it’s important to take our time and get it right.
I suppose I can agree with the sentiment, i.e. it’s important to get it right, but….I do have to wonder…why is it only now that Mr. Gensler has decided that getting it right is more important than getting it done quickly? Why the ever changing rhetoric? And, of course, putting the hypocrasy on the side, it is useful from a market perspective to at least have further clarity on the macro parameters of the remaining uncertainty, but it is nevertheless troubling that there is still so much uncertainty and still so much to be done. One can only hope that the CFTC is as reasonable and flexible in its application of its rules (when it’s finally done writing them) to those who are subject to them as it is in respect of its own statutory compliance.