It's taking longer than expected to put some key new rules into place to regulate the derivatives market, a critical corner of the financial system.
The NYT and WSJ both report on this today, but they tell very different stories about what the delays mean.
The NYT suggests that the delay is being driven by financial firms:
The delays come as regulators extend public comment periods on the rules, and as some on Wall Street and in Congress resist the changes. One result may be that many new safeguards do not take hold in earnest before the next election, an outcome that could open the door for newly elected officials to back away from the overhaul.
... the efforts were especially apparent at a hearing last month in Washington related to derivatives. Some of the most powerful players in the derivatives market — which is closely controlled by just a small group of banks — argued that the government should allow a slow pace of changes for rewriting derivatives contracts.
The WSJ suggests that the delay is causing problems for financial firms:
Banks, investors and companies are scrambling to cope with uncertainty caused by regulators' delays in fleshing out the Dodd-Frank financial-overhaul law, amid fears the holdup might disrupt the $583 trillion derivatives market and spark a wave of lawsuits.
More than 100 new derivatives requirements in the law take effect on July 16, even though regulators have yet to issue final rules in the affected areas. The holdup raises concerns that a large swath of the financial system might be thrown into legal gray areas. ...
Market participants said there is a chance derivatives trading could slow considerably as firms fret over potential legal repercussions from conduct that could be seen as improper.
This is happening because the big finance overhaul that Congress passed last year left many of the details to be worked out by regulators.
Planet Money's own Chana Joffe-Walt reported on this process a few months back. Her main conclusion: Financial firms — and their lobbyists — are driving the conversation about the new rules.
Two regulators were sitting at the head of a big table, with eight people from the banking industry. This is a public hearing, but there seems to be no public in the room. ...
Bart Chilton, a CFTC commissioner, told me industry can be really helpful as he tries to write rules that are smart and make sense. But writing new rules takes time. And Chilton says a typical day "usually starts with lobby meetings and ends with lobby meetings. In the middle, well, we've got lobby meetings."
How is it fair that they have access to you all day long, that they have your attention all day?
"People have a right to representation," Chilton says. "I think the megabanks are more represented than others. But I certainly will meet with anyone who wants to meet with me."
The thing is, for the most part, regular people aren't calling up the CFTC for a meeting.
Tim Ryan, the bank lobbyist, says this is the most important part of the bank reform process — the part where regulators write the actual rules that will govern the system. It is this part of the process, he told me, that you really want to make sure your voice is heard.