Earlier this month I noted the political machinations taking place up on Capitol Hill, as various candidates jostle for the position of head of the Office of Financial Research, which is charged under the Dodd-Frank Act with collecting and storing financial services data for the monitoring of systemic risk. There are a number of candidates rumoured to be up for the role of gatekeeper of the US market’s instrument and entity data, including current Treasury officials, academics that have been involved in the lobbying thus far and a few industry bods from the vendor and market practitioner communities.
As with most of these rumours, names cannot be bandied about without some degree of substantiation and with most unwilling to confirm their position, it’s tricky to evaluate who stands the best chance of appointment. Obama has a year to decide on the best candidate for the job, so it could potentially be some time before the market finds out who has won favour with the president and been ratified by Congress.
As key proponents of the precursor to the Office of Financial Research, the National Institute of Finance, those on the membership list of the Committee to Establish the NIF are likely to either be up for consideration or keen to be in the running. Key spokesperson and former director of the Federal Housing Finance Board Allan Mendelowitz could be one such candidate (although this has not been confirmed). Ditto for Penn State University professor John Liechty, who runs his own consultancy business for the financial services market and worked alongside Mendelowitz to get the idea on the political agenda. The Nobel prize winners involved in the CE-NIF campaign are also likely to feature on the list of potential candidates.
As recently noted by EDM Council member Mike Bennett on our Facebook page, academics with a good grip of economics may be seen as a solution to the regulatory challenge of “flying blind” in the area of financial data. By appointing a candidate with a good knowledge of the overall picture of financial data across the market, such as a statistician or economist, the Office of Financial Research could contribute more to the cause of systemic risk monitoring, or so the logic goes…
Experience in the data management industry is therefore not likely to be essential to the role. After all, the focus is on systemic risk tracking and experience of the risk function at a senior level is bound to appeal more to those in charge of short listing candidates. They’ll also want a big name to garner the industry’s attention – so someone that has held a senior role within the industry is likely to appeal the most.
Any candidate will also have to be politically savvy, as they’ll have to get the job in the first place and be able to act as a mediator between the industry and those in the political and regulatory sphere.
It will likely be left up to the vendor that wins the contract to set up the utility itself to work out the finer technical details of the project (how on earth it will function in the way it intends to). A job that the EDM vendor community and players such as the DTCC are likely keen to get their hands on.