About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Odds On?

Subscribe to our newsletter

The more people I speak to, the more cynical I get about the future of the US Office of Financial Research. It seems that some are even close to running a book on how long it will be before the government backs away from the idea, given the changing political dynamics on Capitol Hill.

In the interests of full disclosure: to be fair, I have always been quite cynical about the future of a government run utility, especially in light of the half a billion dollars of government spend it will require to set up. I’m not saying such a utility won’t be established, but I’m fairly sure it will need to be run as a commercial enterprise rather than as an agency of the Treasury if it hopes to succeed.

Many of those in certain right leaning political circles are also sceptical about its future and given that the Republicans are to take control of the House of Representatives this month, many regulatory reform measures are potentially up for review, not least of which could be the Office of Financial Research. After all, certain US politicians have been particularly vocal about their perception of the new agency as a waste of time and money – see US Republican senator Richard Shelby’s comments last year, for example, or the discussions during the Congress debate on the subject. These opinions are bound to come to the fore as power is ceded to the Republicans.

Moreover, if the US government is struggling to increase the funding of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), how can it possibly pour US$500 million into a new agency?

Obama has come under continuing pressure to rein in government spending and this pressure is increasing gradually over time. At the end of last year, the collapse of the planned US$1.1 trillion Senate budget for an increase in spending for the regulatory community to carry out the requirements of the Dodd Frank Act was not a good omen. The plan was to double the SEC’s budget by 2015, with the regulator receiving an additional US$1.3 billion, and the CFTC’s budget was to expand by US$117 million. Budget cutbacks have put paid to both of those increases.

Granted, the legal entity identification standards discussions are progressing, with the end of January deadline for responses to the Office of Financial Research’s request for comment fast approaching. But, as they say: talk is cheap, half a billion dollars isn’t.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Cross-Regulation Data Consistency and Accuracy

Regulatory reporting obligations continue to expand, bringing with them more overlaps of data elements across reporting regimes. As many firms struggle with the accuracy and completeness of individual reporting obligations, regulators have increasingly begun to focus on cross-regulation data consistency in their data validations and examination processes. This webinar will identify cases of data overlap...

BLOG

EU Regulatory Priorities for 2023, According to our Brussels Insider

Higher Interest Rates, A Volatile Crypto-Asset Environment and the Growth of Opaque Non-Bank Institutions Challenge Central Banks and Regulators in the EU. These were the opening remarks of Dr. David Doyle, an EU financial services regulatory expert, and frequent speaker at A-Team Group conferences, when we met up with him early in the New Year...

EVENT

TradingTech Briefing New York

TradingTech Insight Briefing New York will explore how trading firms are innovating and leveraging technology as a differentiator in today’s cloud and digital based environment.

GUIDE

Regulatory Data Handbook 2022/2023 – Tenth Edition

Welcome to the tenth edition of A-Team Group’s Regulatory Data Handbook, a publication that has tracked new regulations, amendments, implementation and data management requirements as regulatory change has impacted global capital markets participants over the past 10 years. This edition of the handbook includes new regulations and highlights some of the major regulatory interventions challenging...