July 29, 2011

Dodd-Frank: Two Perspectives



For the 2,000 non-viewers of The Daily Show (no relation) who did not see John Stewart and John Oliver's  Schoolhouse Rock-inspired update on the Dodd-Frank Wall Street Reform and Consumer Protection Act, this sketch nails it head on for the average consumer and investor. The terms of the Act are very vague and the regulators - the US Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) are underfunded.

However, covering the wholesale banking industry for the past several years, I have to defend the industry a bit when it comes to winding down such a large market like swaps and spinning up a new one in its place. If you look for a political equivalent for what Dodd-Frank aims to do, it would have to be nation building - just replacing the bullets with bucks. It's easy to tear down a complex system that's developed over decades, but developing a replacement to it is not something that can be accomplished overnight.


Posted by at 6:42 PM
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