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Chamber Report Highlights Benefits of Cost-Benefit Analysis

The U.S. Chamber of Commerce has issued a report highlighting the benefits of cost-benefit analysis for financial regulators.  The report traces the history of cost-benefit analysis, focusing on how financial regulators have been “slower and more haphazard” in adopting rigorous cost-benefit analysis than their executive agency counterparts.    It highlights how the Inspectors General of the SEC and CFTC have found serious deficiencies in the financial regulators’ use of cost-benefit analysis after Dodd-Frank and discusses how the D.C. Circuit Court has repeatedly faulted the SEC’s cost-benefit analysis in rulemaking.  The authors also consider, and reject, arguments that conducting a proper cost-benefit analysis is wrong as a matter of policy and/or law. The authors find that cost-benefit analysis is “a fundamental building block to ensure regulations work as intended.”  The report recommends that agencies apply rigorous cost-benefit analysis to improve rulemaking and put in place more effective regulations.