Can’t we just ask the regulator?: Difference between revisions

{{a|devil|{{image|Conundrum with Whiteboard|png|“Conundrum with Whiteboard”. {{vsr|1995}}}}}}It is well known and widely reported that regulations have grown in scope, density, interrelation and complication since those mad, dreamy Eighties days when rules were for birds and the Randian spirit of Aleister Crowley was the dominant fingerpost showing the way towards market governance.   

In recent times this carefree impulse has fallen on stony ground. Of course it has: to survive its own auto-destruction, any new programme must self-organise: that founding spirit of optimistic anarchy will resolve to well-meant gentle governance which in time will calcify into impenetrable rules, etiquettes and ways of operating [[calculated]] to maintain the emergent power structure around the programme. This happened to the fifties, to rock ’n’ roll, in the noughties to the internet, it’s happening to crypto right now and will happen to AI at some point in the future — as long as Skynet doesn’t happen first.  

A freedom that once seemed hopeful and elegant now seems barbaric in its simplicity. We have become inured to the idea that our every or financial impulse should be minutely monitored, reported, and regulated.  

And that is fine. Being a pragmatist, it is not the [[Jolly Contrarian|JC]]’s motive to take sides in the cosmic debate: rather, to say, however heavily we frame our rules, good governance and our well-rehearsed imperative of juridical [[certainty]] requires them to be as plain, clear and actionable as they can be. The world is [[Certainty|uncertain]] and [[Complexity|non-linear]] enough: the guardrails we erect to protect each other from it should not be. We should not be left in doubt what we can and cannot do. We should not be held hostage for the consequence of acting in a case of genuine doubt.   

Nor should rules be above criticism: times change, unintended consequences emerge, people make bad rules. Practitioners at the coal face are the first to apprehend them. They should not be loathe to point them out.   

The reality is that global regulation is a ''monstrous'' burden. Even sensible jurisdictions have a habit of mandating multiple regulators overseeing ostensibly the same territory ([[SEC]], [[CFTC]], FRB, FDIC in the US alone), and that is before we deal with the conundrum of cross-border regulation where conflicts and regulatory perimeters come into play, and the actions of supranational bodies such as the [[Basel Committee on Banking Supervision]].

This is licence enough for the military-industrial complex of legal, accounting and compliance advisors that have grown around the markets, but it is made worse by the reluctance of regulators to take a position on what their own rules mean. Continental tax authorities might occasionally issue, and agree to be bound by a tax ruling; the SEC issues the occasional “no-action letter” which is more by way of forbearance from enforcement of rules, rather than an interpretation of them. There are no [[Bright-line test|bright lines]].

Anyone in the business will know this is the aspiration of an utter fantasist. Anglo Saxon regulators wouldn’t dream of giving guidance, perhaps fearing the [[precedent]] an erroneous ruling night create, perhaps acknowledging that their own staff have no better idea what the rules are meant to mean than anyone else: they are as prone to budget cuts, outsourcing, and the dogma of management by data as anyone else.