Too Big to Fail — U.S. Banks’ Regulatory Alchemy: Converting an Obscure Agency Footnote into an “At Will” Nullification of Dodd-Frank’s Regulation of the Multi-Trillion Dollar Financial Swaps Market

The multi-trillion-dollar market for, what was at that time wholly unregulated, over-the-counter derivatives (“swaps”) is widely viewed as a principal cause of the 2008 worldwide financial meltdown. The Dodd-Frank Act, signed into law on July 21, 2010, was expressly considered by Congress to be a remedy for this troublesome deregulatory problem. The legislation required the swaps market to comply with a host of business conduct and anti-competitive protections, including that the swaps market be fully transparent to U.S. financial regulators, collateralized, and capitalized. The statute also expressly provides that it would cover foreign subsidiaries of big U.S. financial institutions if their swaps trading could adversely impact the U.S. economy or represent the use of extraterritorial trades as an attempt to “evade” Dodd-Frank. In July 2013, the CFTC promulgated an 80-page, triple-columned, and single-spaced “guidance” implementing Dodd-Frank’s extraterritorial reach, i.e., that manner in which Dodd-Frank would apply to swaps transactions executed outside the United States. The key point of that guidance was that swaps trading within the “guaranteed” foreign subsidiaries of U.S. bank holding company swaps dealers were subject to all of Dodd-Frank’s swaps regulations wherever in the world those subsidiaries’ swaps were executed. At that time, the standardized industry swaps agreement contemplated that, inter alia, U.S. bank holding company swaps dealers’ foreign subsidiaries would be “guaranteed” by their corporate parent, as was true since 1992. In August 2013, without notifying the CFTC, the principal U.S. bank holding company swaps dealer trade association privately circulated to its members standard contractual language that would, for the first time, “deguarantee” their foreign subsidiaries. By relying only on the obscure footnote 563 of the CFTC guidance’s 662 footnotes, the trade association assured its swaps dealer members that the newly deguaranteed foreign subsidiaries could (if they so chose) no longer be subject to Dodd-Frank. As a result, it has been reported (and it also has been understood by many experts within the swaps industry) that a substantial portion of the U.S. swaps market has shifted from the large U.S. bank holding companies swaps dealers and their U.S. affiliates to their newly deguaranteed “foreign” subsidiaries, with the attendant claim by these huge big U.S. bank swaps dealers that Dodd-Frank swaps regulation would not apply to these transactions. The CFTC also soon discovered that these huge U.S. bank holding company swaps dealers were “arranging, negotiating, and executing” (“ANE”) these swaps in the United States with U.S. bank personnel and, only after execution in the U.S., were these swaps formally “assigned” to the U.S. banks’ newly “deguaranteed” foreign subsidiaries with the accompanying claim that these swaps, even though executed in the U.S., were not covered by Dodd-Frank. In October 2016, the CFTC proposed a rule that would have closed the “deguarantee” and “ANE” loopholes completely. However, because it usually takes at least a year to finalize a “proposed” rule, this proposed rule closing the loopholes in question was not finalized prior to the inauguration of President Trump. All indications are that it will never be finalized during a Trump Administration. Thus, in the shadow of the recent tenth anniversary of the Lehman failure, there is an understanding among many market regulators and swaps trading experts that large portions of the swaps market have moved from U.S. bank holding company swaps dealers and their U.S. affiliates to their newly deguaranteed foreign affiliates where Dodd- Frank swaps regulation is not being followed. However, what has not moved abroad is the very real obligation of the lender of last resort to rescue these U.S. swaps dealer bank holding companies if they fail because of poorly regulated swaps in their deguaranteed foreign subsidiaries, i.e., the U.S. taxpayer. While relief is unlikely to be forthcoming from the Trump Administration or the Republican-controlled Senate, some other means will have to be found to avert another multi-trillion-dollar bank bailout and/or a financial calamity caused by poorly regulated swaps on the books of big U.S. banks. This paper notes that the relevant statutory framework affords state attorneys general and state financial regulators the right to bring so-called “parens patriae” actions in federal district court to enforce, inter alia, Dodd- Frank on behalf of a state’s citizens. That kind of litigation to enforce the statute’s extraterritorial provisions is now badly needed

Delayed colorectal cancer care during covid-19 pandemic (decor-19). Global perspective from an international survey

Background The widespread nature of coronavirus disease 2019 (COVID-19) has been unprecedented. We sought to analyze its global impact with a survey on colorectal cancer (CRC) care during the pandemic. Methods The impact of COVID-19 on preoperative assessment, elective surgery, and postoperative management of CRC patients was explored by a 35-item survey, which was distributed worldwide to members of surgical societies with an interest in CRC care. Respondents were divided into two comparator groups: 1) ‘delay’ group: CRC care affected by the pandemic; 2) ‘no delay’ group: unaltered CRC practice. Results A total of 1,051 respondents from 84 countries completed the survey. No substantial differences in demographics were found between the ‘delay’ (745, 70.9%) and ‘no delay’ (306, 29.1%) groups. Suspension of multidisciplinary team meetings, staff members quarantined or relocated to COVID-19 units, units fully dedicated to COVID-19 care, personal protective equipment not readily available were factors significantly associated to delays in endoscopy, radiology, surgery, histopathology and prolonged chemoradiation therapy-to-surgery intervals. In the ‘delay’ group, 48.9% of respondents reported a change in the initial surgical plan and 26.3% reported a shift from elective to urgent operations. Recovery of CRC care was associated with the status of the outbreak. Practicing in COVID-free units, no change in operative slots and staff members not relocated to COVID-19 units were statistically associated with unaltered CRC care in the ‘no delay’ group, while the geographical distribution was not. Conclusions Global changes in diagnostic and therapeutic CRC practices were evident. Changes were associated with differences in health-care delivery systems, hospital’s preparedness, resources availability, and local COVID-19 prevalence rather than geographical factors. Strategic planning is required to optimize CRC care

Reduction of cardiac imaging tests during the COVID-19 pandemic: The case of Italy. Findings from the IAEA Non-invasive Cardiology Protocol Survey on COVID-19 (INCAPS COVID)

Background: In early 2020, COVID-19 massively hit Italy, earlier and harder than any other European country. This caused a series of strict containment measures, aimed at blocking the spread of the pandemic. Healthcare delivery was also affected when resources were diverted towards care of COVID-19 patients, including intensive care wards. Aim of the study: The aim is assessing the impact of COVID-19 on cardiac imaging in Italy, compare to the Rest of Europe (RoE) and the World (RoW). Methods: A global survey was conducted in May–June 2020 worldwide, through a questionnaire distributed online. The survey covered three periods: March and April 2020, and March 2019. Data from 52 Italian centres, a subset of the 909 participating centres from 108 countries, were analyzed. Results: In Italy, volumes decreased by 67% in March 2020, compared to March 2019, as opposed to a significantly lower decrease (p < 0.001) in RoE and RoW (41% and 40%, respectively). A further decrease from March 2020 to April 2020 summed up to 76% for the North, 77% for the Centre and 86% for the South. When compared to the RoE and RoW, this further decrease from March 2020 to April 2020 in Italy was significantly less (p = 0.005), most likely reflecting the earlier effects of the containment measures in Italy, taken earlier than anywhere else in the West. Conclusions: The COVID-19 pandemic massively hit Italy and caused a disruption of healthcare services, including cardiac imaging studies. This raises concern about the medium- and long-term consequences for the high number of patients who were denied timely diagnoses and the subsequent lifesaving therapies and procedures

Impact of COVID-19 on Diagnostic Cardiac Procedural Volume in Oceania: The IAEA Non-Invasive Cardiology Protocol Survey on COVID-19 (INCAPS COVID)

Objectives: The INCAPS COVID Oceania study aimed to assess the impact caused by the COVID-19 pandemic on cardiac procedure volume provided in the Oceania region. Methods: A retrospective survey was performed comparing procedure volumes within March 2019 (pre-COVID-19) with April 2020 (during first wave of COVID-19 pandemic). Sixty-three (63) health care facilities within Oceania that perform cardiac diagnostic procedures were surveyed, including a mixture of metropolitan and regional, hospital and outpatient, public and private sites, and 846 facilities outside of Oceania. The percentage change in procedure volume was measured between March 2019 and April 2020, compared by test type and by facility. Results: In Oceania, the total cardiac diagnostic procedure volume was reduced by 52.2% from March 2019 to April 2020, compared to a reduction of 75.9% seen in the rest of the world (p<0.001). Within Oceania sites, this reduction varied significantly between procedure types, but not between types of health care facility. All procedure types (other than stress cardiac magnetic resonance [CMR] and positron emission tomography [PET]) saw significant reductions in volume over this time period (p<0.001). In Oceania, transthoracic echocardiography (TTE) decreased by 51.6%, transoesophageal echocardiography (TOE) by 74.0%, and stress tests by 65% overall, which was more pronounced for stress electrocardiograph (ECG) (81.8%) and stress echocardiography (76.7%) compared to stress single-photon emission computerised tomography (SPECT) (44.3%). Invasive coronary angiography decreased by 36.7% in Oceania. Conclusion: A significant reduction in cardiac diagnostic procedure volume was seen across all facility types in Oceania and was likely a function of recommendations from cardiac societies and directives from government to minimise spread of COVID-19 amongst patients and staff. Longer term evaluation is important to assess for negative patient outcomes which may relate to deferral of usual models of care within cardiology