The Second Half: Interest Group Conflicts and Coalitions in the Implementation of the Dodd-Frank Act Derivatives Rules


This chapter investigates the implementation of Dodd-Frank derivatives rules between 2010 and 2015. While in a number of areas the implementation phase has led to a narrowing of the scope of the regulatory net casted by Dodd-Frank over derivatives markets, this whittling down of Dodd-Frank derivatives rules has not been uniform. In a number of instances, regulators have been able to resist pressures to relax the regulatory requirements and to implement Dodd- Frank without departing from their original proposal.What explains this outcome? Why have regulators implemented the Congressional mandate in narrow ways in some areas while expanding the scope of the regulation in others? The argument put forward in this chapter is that the capacity of regulators to withstand pressures to whittle down the scope and strictness of Dodd-Frank during the implementation phase has been influenced by the breadth and cohesiveness of the opposition front among different interest groups. More specifically, the presence of a cohesive opposition front from different groups from within and outside the financial industry to certain rules has weakened the capacity of regulators to defend to their original proposal and increased the threat of Congress intervening to curtail the autonomy of regulators. By contrast, the presence of disagreements across interest groups has created policy space for regulators to withstand calls for these rules to be watered down.

Chapter included in the volume “Governing the World’s Biggest Market: The Politics of Derivatives Regulation After the 2008 Crisis”, edited by Eric Helleiner, Stefano Pagliari and Irene Spagna, Oxford University Press 2018