Decision Accounting and the Global Regulatory Convergence: A Structural Analysis of Operational Resilience and Individual Accountability Regimes

Retrospective audit cannot fix a structural gap that only a pre-execution welfare gate can close

The paper proves that DORA, SMCR, FAR, CPS 230, and IAC all rely on after-the-fact accountability, leaving a Hollow Win equilibrium intact: bilateral private gains persist while system welfare degrades.

• β_W ≈ 2.1: each dollar of industry revenue destroys ~$2.10 of system welfare
• ΠSA ≈ –$30.0B: negative private surplus across four jurisdictions
• Rule Change R: mandatory Decision Accounting Field 17 before execution

Credit Suisse/Archegos is the canonical Hollow Win: $5.5B lost, system pays

Credit Suisse extended 5.9% margin on a $10B concentrated swap portfolio. Both counterparties gained privately; systemic risk was left with shareholders and the financial system.

• Bilateral private gains: prime brokerage fees for CS, used exposure for Archegos
• System welfare cost: $5.5B loss plus market contagion, unpriced at t0
• Outcome cell (0,1,1): system loses, both agents win

Four regimes name responsibility but miss the decision mechanics at t0

DORA, SMCR, FAR, and CPS 230 improve incident reporting, accountability maps, and post-event enforcement, but none requires a signed, cryptographically attested system-welfare assessment before execution.

• DORA: incident reports and resilience tests, no binding pre-release welfare gate
• SMCR: statements of responsibilities, no signed admissibility record on the risky decision
• FAR: accountability statements and maps, no decision-level burden allocation before execution
• CPS 230: scenario testing and tolerance registers, no real-time pricing of operational externalities

No retrospective regime can remove the unpriced Hollow Win; only a binding prospective gate works

Under axioms A1–A5, the paper proves intractability: any regime that relies on after-the-fact review leaves at least one privately profitable, system-damaging action admissible because the welfare cost is not a t0 constraint.

• A1: bilateral private surplus > 0 after compliance and sanctions
• A2: unpriced system-welfare damage β_W > 0
• A3: no pre-execution Field 17 requirement
• A4: voluntary mechanisms fail to cover the full target class
• A5: feasible to mandate Field 17 via statute or supervisory rule

Field 17 converts omitted damage into an admissibility constraint

A 17-field prospective record captures authority, alternatives, evidence, prediction, and system welfare. Field 17 requires a signed, cryptographically attested system-welfare assessment before execution.

• Five-Minute Test: a stranger must reconstruct what was decided, by whom, why, and what would trigger reconsideration
• Fields 1–15 cover authority, scope, alternatives, evidence, prediction, review
• Field 17 is the capstone: non-derivable from the bilateral payoff space

SolarWinds Orion: 18,000 organizations compromised by an unpriced supply-chain decision

The software vendor and enterprise customers captured bilateral gains from a compromised build process; system welfare degraded across 18,000 downstream organizations. No pre-execution welfare gate existed.

• Private surplus: SolarWinds revenue, customer convenience
• System cost: 18,000 organizations breached, supply-chain contagion
• Retrospective audit (CISA report) could not undo the t0 decision

β_W ≈ 2.1 for global regulatory convergence, based on 100,000 Monte Carlo draws

The System Asset Pricing Model prices each activity's private payoff against its covariance with system welfare destruction. The domain's β_W of 2.1 means each dollar of private surplus destroys $2.10 of system welfare.

• ΠSA ≈ –$30.0B: net private surplus negative across four jurisdictions
• Moderate intractability: below PFAS (β_W ≈ 18) and AMR (β_W ≈ 12), above welfare-positive threshold of 1

Jurisdiction-specific paths for EU, UK, Australia, and Singapore

Each regime can integrate DA Field 17 through amendments to supervisory standards: DORA via ESA standards, SMCR via FCA/PRA rules, FAR via APRA guidance, IAC via MAS technology risk management.

• EU: DORA + ESA supervisory standards, mandatory Field 17 for material ICT decisions
• UK: SMCR + FCA/PRA rules, signed admissibility record for senior-manager delegations
• Australia: FAR + CPS 230, decision-level burden allocation before execution
• Singapore: IAC + MAS guidelines, immutable prediction and consequence record for high-risk actions

Only the Regulator/Legislator lane can activate Rule Change R

The Conflictoring Protocol's six-agent architecture identifies the Regulator/Legislator lane as the critical path. Market-only, plaintiff-only, and whistleblower-only actuation are ruled out for this domain.

• Voluntary mechanisms (board policies, insurance, disclosure) are locally useful but globally incomplete
• A binding gate must be universal, non-revocable, supervisor-verifiable, and decision-complete
• Private infrastructure (exchange, clearing, procurement platform) can implement R if it meets those conditions

From post-hoc blame to prospective engineering: the welfare gate transforms G into G'

Mandatory Field 17 changes the admissibility condition from 'private action plus retrospective accountability' to 'private action plus signed prospective system-welfare accounting.' The Hollow Win equilibrium collapses.

• G': every material decision requires a signed, cryptographically attested Field 17 record
• Residual omitted-risk floor: at q=0.95, at least $275M for Archegos-scale decisions
• Policy implication: institutional, not procedural — only a binding prospective gate achieves G'