There are three distinct phases of leadership when attempting to implement change: vision, structure and implementation. This same process can be applied to congressional leadership regarding U.S. financial reform.
Following the 2008 crisis, Congress crafted a vision for change within the financial industry to help ensure market transparency and risk mitigation. The Dodd-Frank Wall Street Reform and Consumer Protection Act is the legislative structure resulting from that vision. Dodd-Frank was signed into law almost three years ago, and as implementation continues, Congress needs to ensure the regulations promulgated support the original vision for financial reform.
Of Dodd-Frank’s more than 2,300 pages, no section has received greater scrutiny than Title VII, which establishes a regulatory framework for the over-the-counter (OTC) derivatives market. As part of this reform, Congress mandated that all swaps transactions be reported to registered swap data repositories (SDR) to ensure that regulators and the public have transparency into the global OTC derivatives markets as a way to mitigate systemic risk. Unfortunately, Title VII includes provisions that threaten the high level of transparency and global data-sharing envisioned by Dodd-Frank.
Download the Congressional Testimony: Implementing the vision of financial reform