The Treasury's request for public input follows immediately on the heels of their real-world critique of problems with the current regulatory system (see ). Market participants should take up the Treasury on this request for comment. The new regulators appear to be concerned with real, practical problems, such as duplicate or ambiguous regulatory requirements, regulatory costs, diminished liquidity and market fragmentation.

At last, a regulatory discussion that says something more than "there was a financial crisis, so there must be more rules, and more rules will make us safer." This report reads as if it was informed by real work experience. It is a recognition of both the costs and benefits of financial regulation.

The report is not an attack on government. While critical of Dodd-Frank, Treasury acknowledges the better aspects of it, particularly improvements in bank capital ratios. In sum,…

Regulators tend to emphasize bid/offer spread as the key data point for assessing market liquidity. However, that is only one measure of liquidity, and arguably not a very important one. The metric that the regulators should focus on more is the amount of the available liquidity; i.e., the size of the bids and offers. In any case, the authors of this study concede that trading volume in certain products is materially down, which would obviously suggest that available…

In a recent  in Bloomberg BNA, I explained why Congress should look favorably upon the Acting Chair's request.