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Introduction
The FDIC is considering a more structured approach to economic analysis that informs regulatory decisions. The RFI seeks comment on an approach that is based on Circular A-4, the Office of Management and Budget’s peer-reviewed guidance for conducting regulatory impact analysis (RIA) under Executive Order 12,866, as well as economic analysis guidance issued by other financial regulators. The RFI also mentions that the FDIC is considering changes to its internal processes for developing economic analysis.
The FDIC is wise to use Circular A-4 as a template for economic analysis. The analytical approaches in Circular A-4 are critical for determining whether a regulation under consideration is likely to produce more good than harm. The principles in Circular A-4 are also general enough that they can be applied to banking and financial regulation. The Securities and Exchange Commission’s (SEC’s) experience with an analytical framework based on Circular A-4 demonstrates that the framework is practicable and can produce a noticeable improvement in the quality of economic analysis.