As you can imagine, the FDR Framework, with its call for disclosing to market participants all the useful, relevant information in an appropriate, timely manner, is a lightning rod for the dark forces' fight.
The dark forces know that if the FDR Framework is fully implemented, the ability to profit from opacity is eliminated.
Unfortunately, the dark forces have an ally in the fight against the FDR Framework. Their ally is the information monopoly on all the useful, relevant current asset and liability-level data held by the global financial regulators.
The dark forces know that financial regulators are reluctant to give up this information monopoly because it implies significant changes in what the financial regulators can do.
Giving up their monopoly implies that gone are the days when financial regulators can put the financial system at risk for a credit crisis like we just experienced and rush in with taxpayer money to bailout the financial institutions.
Instead, financial regulators would be held responsible for
- making sure to error on the side of 'too much' disclosure when ensuring that market participants have access to all the useful, relevant information in an appropriate, timely manner; and
- analyzing this information with the help of market participants so that the price and amount of the government exposure to any financial institution reflects the riskiness of that institution.
Treasury Secretary Timothy F. Geithner said “dark forces” are waging a “war of attrition” against efforts to strengthen regulation of the financial system.
“You’re seeing some people run a war of attrition against the reform act,” Geithner said at an event today in Washington, without identifying the people. “They’re trying to starve the agencies of funding so they can’t enforce protections for investors.”
Geithner also said opponents of the Obama administration are trying to block presidential appointments to regulatory agencies “as a way to get leverage over the outcome, and they’re trying to slow down so that they can weaken over time the thrust” of the Dodd-Frank financial overhaul law. “We’re not going to let that happen.”
... Asked by a moderator at the breakfast held by Politico to identify the “mysterious forces” working against the administration, Geithner said, “dark forces, I would say.”