Opinion. The claims the Biden administration's crypto executive will provide careful, well-researched regulations are simply unfounded, aier's Thomas Hogan writes.
While regulators are unclear about the benefits of regulations, they consistently underestimate the costs. None of the 27 rule proposals I reviewed considers the costs of greater inequality or how regulatory complexity might increase bank risk.Low-quality research
In a few cases, the research cited by the regulators actually showed that their proposed rules would lead to net costs rather than net benefits. For example, the net stable funding ratio rule does not include cost-benefit analysis, but it does rely on afrom the Basel Committee on Banking Supervision . The regulators claim that the BCBS study shows that the NSFR would benefit the U.S. economy.
At the time the NSFR was proposed in 2016, every bank subject to the rule had a capital ratio above 11%. Every single one! Thus, the BCBS study cited by the regulators themselves showed that the NSFR rule would beThis is the level of shoddy research you should expect in proposals to regulate the crypto industry.Anyone predicting careful, well-researched crypto regulations needs to lower their expectations. It ain’t gonna happen. At least not if history is a useful guide.