The latest legislative offering in the U.S.,
the Financial CHOICE Act, does nothing for securities finance. Nothing in the bill provides an exemption to the funding markets from the crushing weight of regulatory reform. At present, both political parties in the US seem willing to accept an outcome where the global funding markets are road kill from the reform steamroller. Many experts believe this legislative failure is due to analytic omissions on the regulators’ part. In that scenario, regulatory analysts simply don’t understand the global funding mechanism. Therefore, it is thought that regulators have not advised the legislators to offer relief, notwithstanding a steady chorus of complaints from securities lenders and borrowers. However, there is no omission. The regulators are fully aware of the effect of the impact of their rules. They simply choose to leave the new rules intact.