Craig M. Lewis, SEC Cheif Economist and Director, Division of Economic and Risk Analysis (Securities and Exchange Commission)
Craig Lewis, the chief economist of the SEC’s Dvision of Economic and Risk Analysis (DERA), who rarely speaks publicly, this week gave what may be the last speech he delivers before returning to academia and his previous post as a professor at Vanderbilt University.
Addressing the Investment Company Institute’s 2014 mutual funds and investment management conference in Orlando, Lewis highlighted the commission’s emphasis on economic analysis in almost everything it does, and called for other commission stakeholders to do the same.
Lewis underscored his larger point by highlighting what he considers one of his department’s key accomplishment during his tenure: a document titled “Current Guidance on Economic Analysis in SEC Rulemaking” that he says establishes the precept “that economists are part of the rulemaking process from the very start, and thus involved in those crucial policy discussions that occur before words are ever committed to paper.”
“Let me be clear,” Lewis continued. “The commission has always considered the economic effects of its rules and policy choices. But over the past three years that I have been chief economist and the last two that I have overseen my division’s work with the guidance, I have come to believe that this seemingly simple document has focused and enhanced how the Commission and its staff approach economic thought and utilize the expert staff of DERA.”
Lewis told conference attendees an example of this rigorous economic analysis can be seen in the commission’s proposal on money market fund reform.
Lewis concluded his speech by saying that one way the investment community can take advantage of the SEC’s economic analysis is to engage in the same type of discussion. “I challenge you to become an active part of the commission’s engagement with economic thought,” Lewis said. “I encourage you to submit comment letters that contain robust qualitative and quantitative economic analyses of our rules.”
Separately, King & Spalding lawyers, including partners Dixie Johnson and Russell Ryan, highlighted DERA’s work on an “accounting quality model” designed to help the agency analyze financial statements and identify those who may be engaging in acts of fraud.
The provision, which regulators plan to employ soon, could prove to be another Lewis legacy.