Financial Rule-Makers Must Learn to Use Their Calculators

Believe it or not, U.S. financial regulators don’t have to calculate the economic impact of the rules they write. It’s an omission they should correct before it becomes a serious obstacle to fixing the financial system.

The term “cost-benefit analysis” is gaining prominence as the battle over the 2010 Dodd-Frank financial-reform act . Lawyers working for corporate lobbies have challenged several rules on the grounds that the authors failed to fulfill adequately a legal requirement: Regulators must evaluate or consider -- not necessarily quantify -- the costs and benefits of new rules.