The first visible steps have been taken in the government's efforts to promulgate the hundreds of regulations that will be necessary to implement the financial institution reform legislation. The Administration has taken one major step, however, that seems destined to raise significant institutional issues in the implementation of the new law.
Among the first implementing rules to appear, on October 1st the Commodities Futures Trading Commission will propose a critical rule required by the statute, which will increase public visibility of the derivatives market by establishing time periods within which swap transactions must be reported to the government or to a swap depository. The rule also will define the principles governing operation of clearing houses and swap execution facilities. Similarly, the staff of the Federal Reserve Board has begun the consultation process with public interest groups and financial institutions that will be affected by the forthcoming rules by which banks will be regulated.