50% More Bureaucrats = Government “Cost Savings” for Financial Derivatives Reform
Dave Mason /
Sponsors of derivatives “reform” legislation claim it will reduce costs to derivatives users.
Just how more government regulation is supposed to reduce costs in the private sector has never been exactly clear, but discussion at Wednesday’s Senate Agriculture Committee mark-up of derivatives reform legislation revealed that the “reform” will cost taxpayers big time: a 50% increase in staffing (and other costs) at the Commodity Futures Trading Commission (CFTC), the agency that would enforce the new regulations.
CFTC Chairman Gary Gensler, announced at the mark-up that the bill would require 250 new employees and a “substantial” investment in new technology above the approximately 500 employees and $146 million the CFTC will spend this year. What’s more, Gensler said those costs are lower than they might otherwise be because the bill gives the CFTC authority to require derivatives clearinghouses to install and pay for CFTC-mandated electronic monitoring and compliance systems. Gensler did not, however, provide any estimate of how much the government-mandated spyware would “save.”