Some comments on systemic
risk and Dodd–Frank Act: Wall
Street Reform and Consumer
Protection Act
by
Krzysztof Ostaszewski
Systemic Risk
• The crisis of the Fall of 2008 was presented
widely as an extreme case of systemic risk
problem: One financial institution linked so
widely and so greatly to others and to the
economy in general that it can bring the whole
economy down with its failure.
• Yet U.S. financial regulation disintegrated: SEC,
Federal Reserve, FDIC, OTS, Department of
Labor supervision of pensions, state insurance
regulation.
New systemic risk agencies
• EU: European Systemic Risk Board established
December 16, 2010. European Central Bank is
its parent agency.
• USA: Financial Stability Oversight Council,
formed July 21, 2011. Headed by Secretary of
Treasury, but technically not a subsidiary of
the Department of Treasury.
• Did integrated financial supervision perform
better in this crisis?
The Last Fairy Tale …
• When my daughter Angelica was little, we
read her fairy tales to put her to sleep. My
wife did most of the work, I was studying for
actuarial exams.
• I noted that Angelica asked for more stories by
asking: “The last one, please, the last one …”
• When the feds saved creditors of Continental
Illinois, of lenders to Latin America, or
creditors of LTCM, it was always “the last one.”
Dodd-Frank Act
• Signed into law by President Barack Obama on
July 21, 2010.
• The law was initially proposed on December 2,
2009, in the House of Representatives by
Barney Frank, and in the Senate Banking
Committee by Chairman Chris Dodd.
Provisions
• Title I - Financial Stability
• Title II - Orderly Liquidation Authority
• Title III - Transfer of Powers to the Comptroller, the
FDIC, and the FED
• Title IV - Regulation of Advisers to Hedge Funds and
Others
• Title V – Insurance
• Title VI - Improvements to Regulation
• Title VII - Wall Street Transparency and Accountability
• Title VIII - Payment, Clearing and Settlement
Supervision
Provisions
• Title IX - Investor Protections and Improvements to the
Regulation of Securities
• Title X - Bureau of Consumer Financial Protection
• Title XI - Federal Reserve System Provisions
• Title XII - Improving Access to Mainstream Financial
Institutions
• Title XIII - Pay It Back Act
• Title XIV - Mortgage Reform and Anti-Predatory
Lending Act
• Title XV - Miscellaneous Provisions
• Title XVI - Section 1256 Contracts
Key issues in Dodd-Frank
• Systemic risk oversight.
• Supervision and liquidation of failed
institutions that were considered to be out to
be too big to fail in the past.
• Regulatory restructuring and increased
regulatory powers.
• Bureau of Consumer Financial Protection and
other consumer protections.
• The Volcker Rule. NOT.
Regulation of insurance in the
United States
• 1865 case Paul v. Virginia: State regulation,
because insurance is not commerce.
• 1944 case U.S. v. Southeastern Underwriters:
Reverses Paul v. Virginia.
• 1945: McCarran-Fergusson Act: Federal
government delegates insurance regulation to
the states, but antitrust laws apply to insurance.
• AIG debacle prompted federal regulation in
Dodd-Frank.
A New Foundation: Original proposal
by President Obama
• Consolidation of regulatory agencies, elimination
of national thrift charter, and new oversight
council to evaluate systemic risk.
• Comprehensive regulation of financial markets,
increased transparency of derivatives (bringing
them onto exchanges).
• Consumer protection reforms including a new
consumer protection agency and uniform
standards for "plain vanilla" products as well as
strengthened investor protection.
Original proposal by President Obama
continued
• Tools for financial crises, including a "resolution
regime" complementing the existing Federal Deposit
Insurance Corporation (FDIC) authority to allow for
orderly winding down of bankrupt firms, and including
a proposal that the Fed receives authorization from the
Treasury for extensions of credit in "unusual or exigent
circumstances”.
• Various measures aimed at increasing international
standards and cooperation, including in this section
were proposals related to improved accounting and
tightened regulation of credit rating agencies.
• The Volcker Rule added to the proposal in January
2010.
The Volcker Rule
• Prohibits a bank or institution that owns a bank from
engaging in proprietary trading that isn't at the behest
of its clients, and from owning or investing in a hedge
fund or private equity fund.
• Limited the liabilities that the largest banks could hold.
• Volcker Rule was added as an amendment to financial
regulatory bill, but Senate refused to add it.
• The House-Senate conference brought the Volcker Rule
back, but allowed banks to: invest in hedge funds or
private equity funds (up to 3% of their Tier 1 capital),
do proprietary trading in Treasury securities, bonds
issued by Federal Government entities, such as FNMA
and FHLMC, and municipal bonds.
The Act
• The Act is categorized into sixteen titles and by
one law firm's count, it requires that regulators
create 243 rules, conduct 67 studies, and issue 22
periodic reports.
• The Act changes the existing regulatory structure,
such as creating new agencies (while merging and
removing others) with the objectives being:
streamlining the regulatory process, increasing
oversight of specific institutions regarded as a
systemic risk, amending the Federal Reserve Act,
promoting transparency, and some additional.
New agencies created
• Financial Stability Oversight Council
• Office of Financial Research
• Bureau of Consumer Financial Protection.
Title I: Financial Stability
• Creates the Financial Stability Oversight
Council and the Office of Financial Research.
• Two new offices are attached to the Treasury
Department, with the Treasury Secretary
being Chair of the Council, and the Head of
the Financial Research Office being a
Presidential appointment with Senate
confirmation.
Purposes of the Financial Stability
Oversight Council
• Identify the risks to the financial stability of
the United States from both financial and nonfinancial organizations.
• Promote market discipline, by eliminating
expectations that the Government will shield
them from losses in the event of failure.
• Respond to emerging threats to the stability of
the US financial system.
Membership of the Financial Stability
Oversight Council
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Secretary of the Treasury (chairs the Council)
Chairman of the Federal Reserve
Comptroller of the Currency
Director of the Bureau of Consumer Financial Protection
Chairperson of the U.S. Securities and Exchange Commission
Chairperson of the Federal Deposit Insurance Corporation
Chairperson of the Commodity Futures Trading Commission
Director of the Federal Housing Finance Agency
Chairman of the National Credit Union Administration Board
Plus one independent member (with insurance expertise),
appointed by the President, with the advice and consent of the
Senate, for a term of 6 years
Nonvoting members of the Financial
Stability Oversight Council
• Director of the Office of Financial Research (part of the
Treasury Department and established in the Act) who is the
Council's executive director
• Director of the Federal Insurance Office (part of the Treasury
Department and established in this Act)
• One state insurance commissioner, to be designated by a
selection process determined by the state insurance
commissioners (2-year term)
• One state banking supervisor, to be designated by a selection
process determined by the state banking supervisors (2-year
term)
• One state securities commissioner (or officer performing like
function) to be designated by a selection process determined
by such state security commissioners (2-year term).
Resources of the Financial Stability
Oversight Council
• The Federal Advisory Committee Act, which limits the
powers of advisory committees, does not apply to the
Council.
• The Council has an almost unlimited budget in that the
Council may draw on virtually any resource of any
department or agency of the Federal government.
• An employee of the Federal Government detailed to
the Council shall report to and be subject to oversight
by the Council during the assignment to the Council,
and shall be compensated by the department or
agency from which the employee was detailed.
Authority of the Financial Stability
Oversight Council
• The Council has very broad powers to monitor, investigate
and assess any risks to the US financial system.
• The Council has the authority to collect information from
any State or Federal financial regulatory agency, and may
direct the Office of Financial Research to collect
information from bank holding companies and nonbank
financial companies.
• Under specific circumstances, the Chairman of the Council
(Secretary of the Treasury), with the concurrence of 2/3
voting members, may place nonbank financial companies
or domestic subsidiaries of international banks under the
supervision of the Federal Reserve if it appears that these
companies could pose a threat to the financial stability of
the U. S.
Financial Reporting to the Council
The Council may require any bank or non-bank
financial institution with assets over $50 billion to
submit
•certified reports as to the company’s financial
condition
•systems in place to monitor and control any risks
•transactions with subsidiaries that are regulated
banks
•the extent to which any of the company's activities
could have a potential disruptive impact on financial
markets or the overall financial stability of the country
Office of Financial Research
• Department within the Treasury.
• Office is tasked with providing administrative,
technical, budget analysis and other support
services to the Council and its affiliated agencies.
• Salaries in the Office do not have to follow
standard government scale.
• Office may request, from department or agency
of the United States, "such services, funds,
facilities, staff, and other support services as the
Office may determine advisable.
Support for the Office
• The Data Center, which collects, validates and
maintains (and publishes some of) the data required
to support the Council; which may be obtained from
commercial data providers, publicly available data
sources and the financial entities supervised by state
and Federal agencies; and
• The Research and Analysis Center, which conducts
independent analysis of available information to
identify financially destabilizing effects, and develops
and maintains independent analytical capabilities
and computing.
Title II: Orderly Liquidation
Authority
Liquidation authority
•In General - FDIC and/or the Federal Reserve
•Broker Dealers - SEC and/or the Federal Reserve
•Insurance Companies – Federal Insurance
Office and/or the Federal Reserve
More Title II
• When a financial institution is placed into
receivership under these provisions, within 24
hours the Secretary shall report to Congress,
and within 60 days there shall be a report to
the general public.
• The report on the recommendation to place a
financial company into receivership shall
contain various details on the state of the
company, the impact of its default on the
company, and the proposed action.[
Orderly Liquidation Fund
• The Orderly Liquidation Fund is to be an FDICmanaged fund, to be used by the FDIC in the
event of a covered financial company's
liquidation that is not covered by FDIC or SIPC.
• The method of capitalization is by collecting
risk-based assessment fees on any "eligible
financial company" - which is defined as ”any
bank holding company with total consolidated
assets equal to or greater than $50 billion and
any nonbank financial company supervised by
the Board of Governors."
Orderly Liquidation Authority Panel
• Established inside the United States
Bankruptcy Court for the District of Delaware,
the Panel evaluates the conclusion of the
Secretary of the Treasury that a company is in
(or in danger of) default.
• The Panel consists of three bankruptcy judges
drawn from the District of Delaware, all of
whom are appointed by the Chief Judge of the
United States Bankruptcy Court for the District
of Delaware.
Orderly Liquidation Authority Panel
• If the Panel concurs with the Secretary, the
company in question is permitted to be placed
into receivership.
• If they do not concur, the Secretary has an
opportunity to amend and refile his or her
petition.
• In the event that a Panel decision is appealed,
the United States Court of Appeals for the
Third Circuit has jurisdiction; in the event of
further appeal, may be filed with the United
States Supreme Court.
Title III - Transfer of Powers to the
Comptroller, the FDIC, and the FED
• Abolishing the Office of Thrift Supervision and transferring
its power over the appropriate holding companies to the
Federal Reserve, state savings associations to the FDIC, and
other thrifts to the Office of the Comptroller of the
Currency. The thrift charter is to remain, although
weakened.
• The amount of deposits insured by the FDIC and the
National Credit Union Share Insurance Fund is permanently
increased from $100,000 to $250,000.
• Each of the financial regulatory agencies represented on
the Council shall establish an Office of Minority and
Women Inclusion.
Title IV - Regulation of Advisers to
Hedge Funds and Others
• Significant regulation of hedge funds, and other similar
investment intermediaries for the first time, and is
known severally as the "Private Fund Investment Advisers
Registration Act of 2010”.
• In general, it increases the reporting requirements of
investment advisors, and limits the ability of these
advisors to exclude information in reporting to the
various Federal government agencies. However, there is
an exemption in reporting for Venture Capital Fund
Advisors, certain advisors with assets under management
under $150 million, and family offices (as defined by the
Commission).
Title IV - Regulation of Advisers to
Hedge Funds and Others
• The Act changes the definition of accredited investor,
which means someone with personal or (joint with
spouse) net worth over a 4-year period, that
averages more than $1 million, to exclude the value
of the person's residence from the calculation.
• The Commission is allowed to adjust this value with
time. The Act also provides that the SEC shall, every
five years, adjust for the effects of inflation, that any
factor used in rule or regulation be in multiples of
$100,000.
Title V -- Insurance
• Federal Insurance Office Act of 2010”,
establishes within the Department of the
Treasury the Federal Insurance Office.
Federal Insurance Office tasks
• Monitoring all aspects of the insurance industry
(except health insurance, some long-term care
insurance, and crop insurance).
• Monitoring the extent to which traditionally
underserved communities and consumers,
minorities, and low-and moderate-income persons
have access to affordable insurance (except health
insurance).
• Making recommendations to the Financial Stability
Oversight Council about insurers.
Federal Insurance Office tasks
• Administering the Terrorism Insurance Program.
• Coordinating international insurance matters.
• Determining whether State insurance measure are
preempted by covered agreements (states may have
more stringent requirements).
• Consulting with the States (including State insurance
regulators) regarding insurance matters of national.
• importance and prudential insurance matters of
international importance.
Title VI – Improvements to
Regulation
• Introduces Volcker’s Rule, but not in full.
• Limits banking entities to owning no more in a
hedge fund or private equity fund than 3% of
the total ownership interest.
Total of all of the banking entity’s interests in
hedge funds or private equity funds cannot
exceed 3% of the Tier 1 capital of the banking
entity.
Improvements to Regulation
• The rule distinguishes transactions by banking
entities from transactions by nonbank
financial companies supervised by the Federal
Reserve Board.
• Regulators are required to impose upon
institutions capital requirements that are
"countercyclical, so that the amount of capital
required to be maintained by a company
increases in times of economic expansion and
decreases in times of economic contraction.”
Title VII - Wall Street Transparency
and Accountability
• Regulation of over the counter swaps markets.
• Requires that various derivatives known as
swaps, which are traded over the counter be
cleared through exchanges or clearinghouses.
• Commodity Futures Trading Commission
(CFTC) and the Securities and Exchange
Commission (SEC) both regulate swaps under
the Act, but the SEC has authority over
"security-based swaps".
Title VII - Wall Street Transparency
and Accountability
• The regulators are required to consult with
each other before implementing any rulemaking or issuing orders regarding several
different types of security swaps.
• The Act repeals exemption from regulation for
security-based swaps under the GrammLeach-Bliley Act.
Title VII - Wall Street Transparency
and Accountability
• The title provides that, "Except as provided
otherwise, no Federal assistance may be provided
to any swaps entity with respect to any swap,
security-based swap, or other activity of the
swaps entity.”
• "Interagency Group" is constituted to the
oversight of existing and prospective carbon
markets to ensure an efficient, secure, and
transparent carbon market, including oversight of
spot markets and derivative markets.
Title VIII - Payment, Clearing and
Settlement Supervision
• Gives the Federal Reserve this task: to create
uniform standards for the management of
risks by systemically important financial
organizations in their payment, clearing and
settlement activities.
Title IX - Investor Protections and
Improvements to the Regulation
of Securities
• To prevent regulatory capture within the SEC and
increase the influence of investors, the Act creates an
Office of the Investor Advocate, an Investor Advisory
Committee composed of 12-22 members of whom
serve 4-year terms, and an ombudsman appointed
by the Office of the Investor Advocate.
• The Investor Advisory Committee was actually
created in 2009 and therefore predates the passage
of the Act, but it is specifically authorized under the
Act.
More on Title IX
• SEC is specifically authorized to issue "pointof-sale disclosure" rules when retail investors
purchase investment products or services;
these disclosures include concise information
on costs, risks, and conflicts of interest.
• Subtitle A provides authority for the SEC to
impose regulations requiring "fiduciary duty"
by broker-dealers and investment advisers to
their customers.
Title IX, Subtitle B
• “Whistleblower bounty program” which is
based upon a similar program established by
the IRS in 2006; the program allows persons
who provide information which leads to a
successful SEC enforcement to receive 10 to
30% of the monetary sanctions over $1
million.
• Allows the SEC to prohibit pre-dispute
mandatory binding arbitration.
Title IX, Subtitle B
• Exempts the SEC from disclosing information
obtained pursuant to 17(b) of the Securities
Exchange Act of 1934 or information "based
upon or derived from" such information
"obtained by the Commission for use in
furtherance of the purposes of this title,
including surveillance, risk assessments, or
other regulatory and oversight activities" meaning information derived from
examinations.
Title IX, Subtitle C
• Mandates the creation by the SEC of an Office of
Credit Ratings (OCR) to provide oversight over
nationally recognized statistical rating organizations
(NRSRO) and enhanced regulation of such entities.
• Grants authority to the SEC to temporarily suspend
or permanently revoke the registration of an NRSRO
with respect to a particular class or subclass of
securities if after notice and hearing the NRSRO lacks
the resources to produce credit ratings with integrity.
Title IX, Subtitle C
• SEC prescribes rules with respect to credit rating
procedures and methodologies.
• OCR is required to conduct an examination of each
NRSRO at least annually and shall produce a public
inspection report.
• SEC will require NRSROs to publicly disclose
information on initial and revised credit ratings
issued, including the credit rating methodology
utilized and data relied on, to enable users to
evaluate NRSROs.
Title IX, Subtitle C, NRSROs
• NRSROs are required to establish, maintain, enforce
and document an effective internal control structure
governing the implementation of and adherence to
policies, procedures, and methodologies for
determining credit ratings.
• Submit to the OCR an annual internal control report.
• Adhere to rules established by the Commission to
prevent sales and marketing considerations from
influencing the ratings issued by a NRSRO.
Title IX, Subtitle C, NRSROs
• Policies and procedures with regard to certain
employment transitions to avoid conflicts of
interest, the processing of complaints
regarding NRSRO noncompliance, and
notification to users of identified significant
errors are required.
• Compensation of the compliance officer may
not be linked to the financial performance of
the NRSRO.
Title IX, Subtitle C, NRSROs
• The duty to report to appropriate authorities
credible allegations of unlawful conduct by issuers of
securities.
• The consideration of credible information about an
issuer from sources other than the issuer or
underwriter which is potentially significant to a
rating decision.
• The Act establishes corporate governance,
organizational, and management of conflict of
interest guidelines. A minimum of 2 independent
directors is required.
Title IX, Subtitle D
• Improvements to the Asset-Backed
Securitization Process (for CMO, CDO, CBO,
CDO of ABS, CDO of CDO).
• Regulations for assets if residential in nature
are jointly prescribed by the SEC, the
Secretary of Housing and Urban Development,
and the Federal Housing Finance Agency.
• Otherwise by the Federal Banking agencies
and the SEC.
Title IX, Subtitle D
Securitizers are:
• Prohibited from hedging or transferring the credit
risk it is required to retain with respect to the assets.
• Required to retain not less than 5% of the credit risk
for an asset that is not a qualified residential
mortgage,
• for commercial mortgages or other types of assets,
regulations may provide for retention of less than 5%
of the credit risk, provided that there is also
disclosure.
Title IX, Subtitle E, Accountability
and Executive Compensation
• National securities exchanges and associations will
be required to prohibit the listing of any security of
an issuer that is not in compliance with the
requirements of the compensation sections.
• At least once every 3 years, a public corporation is
required to submit to a shareholder vote the
approval of executive compensation.
• Once every six years there should be a shareholder
vote whether the required approval of executive
compensation should be more often that once every
three years.
Title IX, Subtitle E, Accountability
and Executive Compensation
• Shareholders may disapprove any Golden
Parachute compensation to executives via a
non-binding vote.
• Shareholders must be informed of the
relationship between executive compensation
actually paid and the financial performance of
the issuer, taking into account any change in
the value of the shares of stock and dividends
of the issuer and any distributions.
Title IX, Subtitle E, Accountability
and Executive Compensation
Must disclose to shareholders:
• the median of the annual total compensation
of all employees of the issuer, except the chief
executive officer (or any equivalent position).
• the annual total compensation of the chief
executive officer, or any equivalent position.
• the ratio of the amount of the medium of the
annual total with the total CEO compensation.
Title IX, Subtitle E, Accountability
and Executive Compensation
• The company shall also disclose to
shareholders whether any employee or
member of the board of directors is permitted
to purchase financial instruments that are
designed to hedge or offset any decrease in
the market value of equity securities that are
part of a compensation package.
• Compensation Committee must be
independent.
Title IX, Subtitle E, Accountability
and Executive Compensation
• Federal regulators will proscribe regulations
that a covered company shall disclose to the
appropriate Federal regulator, all incentivebased compensation arrangements with
sufficient information such that the regulator
may determine whether the compensation
package could lead to material financial loss to
the company, and whether it provides the
employee/officer with excessive
compensation, fees, or benefits.
Title IX, Other Sections
• Subtitle F - Improvements to the Management of the
Securities and Exchange Commission.
• Subtitle G - Strengthening Corporate Governance:
permit a shareholder to use a company’s proxy
solicitation materials for the purpose of nominating
individuals to membership on the board of directors.
• Subtitles H - Municipal Securities.
• Subtitle I - Public Company Accounting Oversight
Board, Portfolio Margining, and Other Matters.
• Subtitle J - Securities and Exchange Commission
Match Funding.
Title X - Bureau of Consumer
Financial Protection
Bureau of Consumer Financial Protection, within the
Federal Reserve. Consists of 5 units:
• Research
• Community Affairs
• Complaint Tracking and Collection
• Office of Fair Lending and Equal Opportunity ensuring equitable access to credit
• Office of Financial Literacy - promoting financial
literacy among consumers.
Title XI - Federal Reserve System
Provisions
• New position is created on the Board of
Governors of the Fed, the "Vice Chairman for
Supervision", to advise the Board.
• GAO is now required to perform several
different audits of the Fed.
Title XI - Federal Reserve System
Provisions
The Fed is required to establish prudent standards for
the institutions they supervise that include:
• Risk-Based Capital Requirements and Leverage Limits
• Liquidity requirements;
• Overall risk management requirements;
• Resolution plan and credit exposure report
requirements; and
• Concentration limits.
Title XII: Improving Access for
Mainstream Financial Institutions
Incentives that encourage low and mediumincome people to participate in the financial
systems
• to enable low- and moderate-income
individuals to establish one or more accounts
in a federal insured bank
• make micro loans, typically under $2,500
• provide financial education and counseling
Title XIII: Pay It Back Act
• This title amends the Emergency Economic
Stabilization Act of 2008 to limit the Troubled Asset
Relief Program, by reducing the funds available by
$225 billion (from $700 billion to $475 billion) and
further mandating that unused funds can not be
used for any new programs.
• Any proceeds from the sale of securities purchased
to help stabilize the financial system shall be
dedicated for the sole purpose of deficit reduction
and prohibited from use as an offset for other
spending increases or revenue reductions.
Title XIV - Mortgage Reform and
Anti-Predatory Lending Act
• To be administered by the newly established Bureau
of Financial Consumer Protection.
• Subtitle A - Residential Mortgage Loan Organization
Standards.
• Subtitle B - Minimum Standards for Mortgages.
• Subtitle C - High-Cost Mortgages.
• Subtitle D - Office of Housing Counseling.
• Subtitle E - Mortgage Servicing.
• Subtitle F - Appraisal Activities.
• Subtitle G - Mortgage Resolution and Modification.
Title XV - Miscellaneous Provisions
• Restriction on U.S. Approval of Loans issued by
International Monetary Fund.
• Disclosures on Conflict Materials in or Near the
Democratic Republic of the Congo.
• Reporting on Mine Safety.
• Reporting on Payments by Oil, Gas and Minerals in
Acquisition of Licenses.
• Study on Effectiveness of Inspectors General.
• Study on Core Deposits and Brokered Deposits.
Title XVI - Section 1256 Contracts
• A Section 1256 Contract refers to a section of the IRC
§ 1256 that described tax treatment for any
regulated futures contract, foreign currency contract
or non-equity option. To calculate capital gains or
losses, these trades have traditionally been marked
to market on the last business day of the year.
• A "section 1256 contract" shall not Include: any
securities futures contract or option on such a
contract unless such contract or option is a dealer,
securities futures contract swap form of a derivative,
such as interest rate swaps, currency swaps, etc.
Dodd-Frank issues
• U.S. Treasury Department already had
proposed excluding foreign exchange swaps
from new Dodd-Frank rules governing
derivatives — an exemption for which banks
were pushing hard.
• Fannie Mae and Freddie Mac, the mortgage
giants that largely escaped reform in the
Dodd-Frank financial overhaul.
Dodd-Frank issues
• Congress hasn't provided the SEC any extra
funding to take on these new regulatory
duties.
• Department of Treasury and Federal Reserve
are exempt from margin requirement in
swaps, but … non-U.S. central banks are not.
This is a source of international controversy.
• Dodd-Frank is being implemented far more
slowly than Congress intended.
Dodd-Frank issues
• CFTC issued recently a final order stating which OTC
derivatives rules under Dodd-Frank will take effect on
their scheduled implementation date of July 16, 2011.
• The order also gave temporary exemptions from many
Dodd-Frank swaps requirements and delayed the
implementation of some self-executing swaps rules.
• Basic framework of many swaps regulations is
established under Title VII, many details are left up to a
rulemaking process that is behind schedule.
Dodd-Frank issues
• The law gives federal regulators
unprecedented powers. Yet they are very slow
in implementing it.
• Key question in my opinion: Can federal
regulators be captured again by highly
leveraged financial institutions?
• And one more key question, again my opinion:
Who benefits from high degree of leverage of
financial institutions?