U.S. top officials found themselves in a race against time with respect to finalizing banking rules before President Barack Obama leaves office and hands regulatory power to Donald Trump who has vowed to rewrite the existing financial rule book.
President-elect Trump will take over on Jan. 20 and his fellow Republicans will have control of Congress and government agencies, allowing the new administration to block or roll back many of the last-minute changes.
But by completing far-advanced work on some banking standards in the next 10 weeks, Obama officials would raising the chances that some elements of the regulatory framework will survive.
Some rules are meant to flesh out the Dodd Frank Act of 2010 designed to prevent the next global financial crisis. Trump campaigned on a pledge to scrap the law but now he says only some provisions must go to lighten the regulatory burden.
The Federal Reserve is working on rules to govern matters such as executive pay, market stability and what investments Wall Street may hold.
Last month, Securities and Exchange Commission Chair Mary Jo White said her agency would “in the near term” finish a rule on one thorny issue: how mutual funds manage derivatives.
The SEC and bank regulators have also for years struggled to finalize a rule that would tie more banker pay to the long-term health of their firms rather than short-term performance of Wall Street firms.
With only about 40 working days until the handover, it is not clear which, if any, of those standards will get across the finishing line.
“Just look at the calendar,” said Tom Quaadman of the Chamber of Commerce. “These are intricate rules and there’s not much time.”
The executive pay rule exemplifies the challenge.
Six federal agencies have a say on the compensation standard meant as part of Dodd Frank and a final draft has not yet been offered, industry officials told Reuters.
It would be nearly impossible to circulate a final rule and get the agencies to endorse it while still satisfying standards for clearing such paperwork, several lobbyists who have opposed the rule said.
Banking regulators declined to comment on when the compensation rule might be completed.