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1 H.R. 5323, Derivatives Fairness Act 1 (June 1, 2018)

handle is hein.congrec/dervfrn0001 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE COST ESTIMATE June 1, 2018 H.R. 5323 Derivatives Fairness Act As ordered reported by the House Committee on Financial Services on March 21, 2018 SUMMARY H.R. 5323 would prohibit the federal financial regulators from requiring banks to hold capital against certain derivative contracts. Under current law, the calculation of a bank's capital requirement includes amounts for some derivative contracts. CBO estimates that implementing H.R. 5323 would, on net, increase the deficit by $2 million over the 2019-2028 period. That estimate includes an increase in direct spending of $2 million and an increase in revenues of less than $500,000. Because enacting the bill would increase direct spending and revenues, pay-as-you-go procedures apply. CBO estimates that enacting H.R. 5323 would not increase net direct spending by more than $2.5 billion or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2029. H.R. 5323 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). BASIS OF ESTIMATE For this estimate, CBO assumes that the bill will be enacted near the end of 2018. The budgetary effects of H.R. 5323 stem from the small chance that the Federal Deposit Insurance Corporation (FDIC) would incur additional costs to resolve financial institutions that fail. This cost estimate is based on the analysis underlying projections for the FDIC's financial resolution programs included in CBO's April 2018 baseline. Those projections incorporate a weighted probability of different outcomes for future failures of financial institutions. Most of those outcomes have a very small probability of occurring, but if

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