Better Markets filed of a comment letter with the Commodity Futures Trading Commission (CFTC) in response to a request for a comparability determination by swap dealers in the United Kingdom:

Why It Matters: The importance of the CFTC’s responsibility and duty to undertake robust comparability determinations cannot be overstated. These determinations de facto outsource the protection of U.S. taxpayers, its financial system, and its economy to foreign governments, laws, regulations, regulators, and supervisors. Given that many of those foreign officials failed miserably and repeatedly in the past to protect their own taxpayers, citizens, financial systems, and economies – to catastrophic effect in 2008 – the stakes for the U.S. in such determinations are extremely high.

What We Said: The CFTC’s denial of this request is especially important because the UK’s regulators have failed to protect their own citizens and taxpayers in the past and because UK politicians are currently again engaging in a race to the regulatory bottom to prop up London’s financial sector. In the years before the 2008 crash, the UK lured global financial firms – like the U.S. swap dealers currently requesting comparability – to London with promises of so-called ‘light touch’ regulation, which was code for little if any regulation. While the UK won that race, its citizens and taxpayers lost, as did the world’s financial systems and economies, when it all blew up in 2008.

Bottom Line: History is repeating itself today because UK politicians are currently trying to overcome the damage done by Brexit that forced much of finance to relocate from London to the EU. In trying to make London appealing to financial firms, both major parties are campaigning to be the greatest ‘champion’ of finance in London, which means less regulation, the siren song of financial firms worldwide. That directly endangers America’s citizens, taxpayers, and economy if the CFTC fails to undertake a robust comparability determination and deny the pending request.