Scott O’Malia, one of two Republican commissioners at the Commodity Futures Trading Commission, doesn’t believe that his agency’s standards are up to snuff when it comes to Wall Street reform. “We don’t do proper economic analysis,” O’Malia tells me. His main concern is that regulators have failed to conduct a proper cost-benefit evaluation of the new financial regulations. And O’Malia has taken the unusual step of appealing to the Obama administration to examine the CFTC’s practices.
Others have stepped up to the CFTC’s defense, including Better Markets, a public-interest group that sent its own letter to the OMB in response to O’Malia’s criticism. Dennis Kelleher, the group’s president and CEO, accuses the GOP commissioner of “trying to kill financial reform by burdening it with cost-benefit analyses that it isn’t required to do.” Kelleher argues that such considerations are irrelevant given the tremendous devastation caused by the financial crisis far outstrips the potential cost of any of the proposed regulations on the industry. “It doesn’t really matter what it costs, because the costs to be avoided are so astronomical,” he says.