Open AccessPresidential Pendulums in Finance
Author(s) -
Christina Parajon Skinner
Publication year - 2020
Publication title -
columbia business law review
Language(s) - English
Resource type - Journals
eISSN - 1930-7934
pISSN - 0898-0721
DOI - 10.52214/cblr.v2020i2.7217
Subject(s) - rulemaking , deregulation , notice , financial services , financial regulation , presidential system , financial sector , business cycle , financial market , economics , swing , regulatory reform , finance , lender of last resort , business , monetary policy , market economy , political science , law , monetary economics , central bank , engineering , macroeconomics , mechanical engineering , politics
While administrative law formally requires that financial regulation derive from notice-and-comment rulemaking, Presidents of the past two administrations have made novel use of an array of executive branch tools to effectively regulate and deregulate the financial services industry. This Article claims that such a shift away from formal administrative law rule-making processes toward presidentially driven deregulation has implications for the overall stability of the financial system. Specifically, this Article suggests that a President’s ability to unilaterally and informally deregulate (and, by extension, regulate) the financial sector can make regulatory cycles more frequent. In turn, the financial cycle may become shorter, steeper, and more severe. If Presidents push and pull on the financial sector, the pendulum of economic activity can swing sharper and faster than it has before—with accompanying repercussions for businesses and households in the real economy.