Overhauling financial regulation
경제제제를 분해한다.

The regulatory rumble begins
제제가 몰려오기 시작했다.
May 28th 2009 | BERLIN AND NEW YORK
From The Economist print edition

In America and Europe, new rules are running into stiff resistance—from regulators themselves
미국과 유럽에서 새로운 규칙이 규제주의자들 스스로에게서 반대자들에게도 적용되기 시작했다.

“YOU want to move at the point where people still have the memory of the trauma,” Tim Geithner explained recently when asked about financial regulation. Aware that the crisis is moving into a new phase, with the emphasis shifting from firefighting to working out how supervision should be restructured, America’s treasury secretary wants to seize the moment. He plans to unveil a comprehensive regulatory overhaul by mid-June. Barack Obama has said he wants to sign the changes into law by the year’s end.

"당신은 사람들이 트라우마를 가지고 있는 시점에서 벗어나고 싶죠."
팀가이트너는 금융규제에 관해 질문 받았을 때 이렇게 대답했다. 충격이 새로운 단계로 이동하고 있음을 일깨우는 것이었다. 진화작업에서 감독체계를 어떻게 재설계해야 하는 지로 중심은 변하고 있었다. 그는 6월 중순까지 포괄적인 규제분해의 베일을 벗기겠다고 설명했다. 오바마는 년말까지 법을 개정하겠다고 선언했다.

In Europe, too, the pressure is on. “There’s no room for more delays,” José Manuel Barroso, president of the European Commission, said on May 27th when he unveiled a blueprint for reform of financial supervision. He announced plans to form two new grandly named institutions: a European Systemic Risk Council, which is supposed to provide early warning of possible risks, and a European System of Financial Supervisors, which would be a super-committee of regulators from across the European Union.

유럽에서도 마찬가지로 압박이 시작됐다. "더이상 지체할 수 없다." 유럽위훤회 위원장인 바로쏘는 5월 27일 금융관리감독에 대한 개혁을 공개하며 말했다. 그는 두개의 새로운 거대기관을 설립하겠다고 밝혔다. 조기에 위험을 알리는 기능을 할 유럽시스템위험위원회와 유럽연합의 감독당국을 관장할 유럽금융시스템관리국이 그것이다.

The goals of the two new institutions are admirable. Both are intended to correct a fundamental flaw in European bank regulation and supervision; namely, that although banks are free to operate across borders, they are supervised only by their home countries. Slack oversight by one country can, as the crisis has revealed, spread chaos across many. Yet it is not at all clear that the proposals have been thought through properly. “The European Commission is confusing speed with haste,” says Nicolas Véron of Bruegel, a think-tank in Brussels. “The governance, mandate and funding of these new authorities is not really addressed.” Britain, which has the biggest banking centre, is particularly concerned about the proposed rules, which may cede aspects of the City of London’s banking supervision to Brussels.

새로운 두 기관의 목표는 칭찬할만 하다. 두기관 모두 금이 간 유럽은행규제와 감독을 바로잡고자 만들어졌다. 이름에서도 알 수 있듯이 은행들은 두 기관의 감독을 받지는 않고 해당국가의 관리만 받으면 된다. 한국가라도 감시가 느슨해지면 이번 위기처럼 수많은 나라들이 혼란에 빠질 수 있다. 그러나 제안을 모두 좋게 받아들이지는 않는다. 유럽위원회는 지나치게 빠르다. 브뤼셀의 씽크탱그에 브뤼겔은 말했다. "새로운 기구의 구조와 인력, 근원은 명확하지 않다." 유럽의 금융중심지인 영국은 자국은행의 감독권이 런던에서 브뤼쉘로 가게될까봐 규제제안에 대해 걱정하고 있다.

In America, meanwhile, the plans taking shape face resistance, partly from the bankers they will shackle but even more from regulators and lawmakers. Bankers accept they will be forced to build up bigger capital buffers, which will crimp profitability, and that the liquidity of their balance-sheets will be policed more intensively. The regulatory net will be cast over the “shadow” banking network of hedge funds, money-market funds and the like, to which much financial activity gravitated during the boom.

반면 미국에서는

Big banks, however, still have enough lobbying power to ensure that not every decision goes against them. True, they are still licking their wounds after the recent passage of draconian credit-card reforms. But they are happier with the government’s proposals on derivatives, under which dealers will be able to continue peddling customised swap contracts away from exchanges, albeit with a higher capital charge.

As the crisis has deepened, American bankers have tempered their opposition to the idea of new rules that reduce the chances of another blow-up. “Would I accept regulation that slows innovation a bit and knocks three percentage points off my returns if it promised greater stability? Absolutely,” says the head of one large bank.

For some, more stringent regulation even has a silver lining. With tougher mortgage rules, banks will no longer have to lower their standards to compete with the industry’s unregulated parts. The survivors could also benefit from higher barriers to entry.

On the whole, Wall Street sees a welcome disconnect between the Obama administration’s rhetoric and its actions. The Treasury is “gradually learning” how to square the circle of showing that it understands the public’s anger on the one hand, and maintaining a dynamic financial sector on the other, says one bank lobbyist. Another test of its capacity to resist pitchfork-wielding urges will come in the next few weeks, when it is expected to issue guidelines on executive pay.

The stiffest resistance to change is coming not from Wall Street but from Washington, DC, where government officials, regulators and congressional leaders are locked in turf wars and ideological battles. “Opinion has splintered. Everyone is fighting everyone,” says Bert Ely, a consultant on regulatory issues.

Even the main banking agencies are at odds with each other. Sheila Bair of the Federal Deposit Insurance Corporation (FDIC) and John Dugan, the Comptroller of the Currency, have fallen out over Ms Bair’s deposit-insurance reforms. Mr Dugan also opposes the FDIC’s push for sole authority to liquidate failing non-banks, as it already does with banks.

Worse, there is no consensus on the proposed systemic-risk regulator, which would identify and act on emerging “macro-prudential” dangers. The administration wants the Fed to assume the role, but many in Congress oppose this. Dick Shelby, an influential senator, has accused Mr Geithner of using the crisis to hand the Fed unacceptable levels of power. Meanwhile, Ms Bair has suggested that systemic regulation be done (or at least overseen) by a multi-agency council, an idea that is gaining traction even if others (including, again, Mr Dugan) worry that such supervision-by-committee is a recipe for inaction.

An even bigger battle is brewing over the shake-up of existing regulators. No one doubts that the archaic, overlapping patchwork of agencies needs modernising, with regulation refocused on a firm’s activities rather than its legal form. Reportedly, the White House is considering rolling the four banking-supervision agencies into one, though the idea is still in flux.

But an embryonic plan to create a super-regulator for consumer products, such as mortgages, credit cards and mutual funds, is already encountering stiff opposition. The Securities and Exchange Commission (SEC), which would lose out in such a shuffle, has powerful friends on Capitol Hill, especially on the Senate banking committee that oversees the agency—and any overhaul would require congressional approval. Public pension funds have also joined together to lobby against a reduction in the SEC’s power.

Moreover, the economically rational may not be politically feasible. Though it would make sense to merge the SEC with the Commodity Futures Trading Commission, which regulates derivatives, Congress’s powerful agriculture committee would probably block the move.

Debate about other thorny issues, such as what restrictions to place on, or whether to dismantle, banks that are too big to fail has barely begun. Congressional leaders cannot even agree on whether to pass new rules in pieces or roll them up into one mega-bill.

All of which explains why pundits now expect to see few, if any, further financial reforms passed in 2009. Delay could play into the financial industry’s hands, to the extent that it reduces the likelihood of heat-of-the-moment laws like Sarbanes-Oxley, rushed through after the Enron scandal. But if measures that would increase stability fall victim to politics, everyone will be worse off.