Better Markets is celebrating its 10-year anniversary. To mark the event, Better Markets is publishing a series of blog posts profiling members of its staff and highlighting the work they do as lawyers, regulatory and legislative specialists, researchers, administrators, and fundraisers as they fight for the economic security, opportunity and prosperity of all Americans, particularly those who are disenfranchised.
Spotlight: Joseph Cisewski, Senior Derivatives Consultant and Special Counsel
Background: One of Joe’s primary focuses at Better Markets is on regulatory actions that have the potential to affect the derivatives and commodities markets. He is an authority on the regulation of securities, derivatives, and commodities markets and has held several senior positions with the CFTC, the SEC, and global financial institutions. He has been with Better Markets for 2 ½ years.
Immediately prior to joining Better Markets, Joe was the Global Head of U.S. Securities and Derivatives Advisory within the Global Banking and Markets Division of HSBC Bank plc, a London-based commercial bank and derivatives dealer. In that role, he managed a team of attorneys and other professionals focused on the firm’s interpretations of U.S. law and strengthening compliance and controls frameworks across the bank’s markets businesses.
Joe previously served in a number of roles at the CFTC, including as the agency’s Co-Chief of Staff and Co-Chief Operating Officer and as Senior Special Counsel to CFTC Commissioner Mark P. Wetjen during the CFTC’s implementation of the Dodd-Frank Act. He also served as a supervisory attorney and branch chief in the SEC’s Division of Trading and Markets.
What do you think will be a pressing financial regulatory issue under the Biden administration?
From a systemic risk standpoint, I remain concerned about the size and complexity of Wall Street’s largest banks.
Don’t get me wrong, global regulators have taken critical steps to mitigate risks posed by these banks since 2008. They have required additional equity-based capital as a financial cushion in the event of an economic downturn. They have supplemented risk-based capital measures with capital requirements tied (mostly) to reliable balance sheet measures. They have required the largest banks to structure liabilities and maintain high-quality liquid assets commensurate with short-term liabilities. They have required loss-absorbing resources to help manage bank failures and implemented trading reforms, like the Volcker Rule, to prevent losses and failures in the first instance.
And they have reformed securities and derivatives markets to reduce the risks of the ever-growing list of permissible bank activities.
The devil is in the details of these imperfect reforms, to be sure, but the U.S. banking system undoubtedly is safer and sounder than it was in the lead-up to the 2008 financial crisis.
Yet, that conclusion relies on the wrong baseline and distracts from the more important questions of whether the U.S. financial system is sufficiently safe and sound and focused on activities that support the productive economy. There are many reasons to doubt that after years of de-regulatory actions repealing and complexifying post-crisis reforms through exemptions, exclusions, exceptions, and definitional loopholes.
In my view, one of the most pressing issues is not whether but how U.S. regulators should address the continued risks posed by an exceedingly small number of too-big-to-fail and too-big-to-manage Wall Street banks. It’s a complex issue, and all ideas should be on the table—from higher capital requirements under current frameworks to size limitations to ring fencing to stricter bank activities restrictions; or perhaps some combination of these—so that policymakers can explicitly weigh trade-offs of different regulatory approaches.
What are you most proud of regarding your work at Better Markets?
Better Markets is fiercely independent, and we see ourselves as bringing much-needed balance to policy discussions in Washington, D.C.
From time to time, one might reasonably disagree with our policy views or emphasize different aspects of an issue. That’s not just acceptable but good for public discourse. We’re always in the process of learning more about an issue or examining a problem from a new perspective. Unlike most lawyers and others in town, however, we never have to pursue arguments merely because they are in a client or member’s commercial interest. We have the credibility of focusing solely on the public interest and representing the views of those otherwise left behind in the policymaking process.
So, I am grateful to have an opportunity to spend my time trying to influence policy from that public interest perspective alone. It’s a great privilege and responsibility and frankly, a freedom that not many have outside of public service.