Is there any point in getting a one year-old a birthday present? It’s a question of etiquette that has stumped FT Alphaville for many years. Should you just get the parents something? Or put something in trust for when they grow up? Spend it on a six-pack to get you through the wailing cacophany of a birthday party? What to do?
A similar pickle presents us with the Dodd-Frank Act, which was signed into law by President Obama on July 21, 2010. It may look harmless — or indeed downright right cute — but what if it grows up to be a monster that would have made Doris Lessing proud?
(This metaphor is really careening of in the wrong direction – Ed.)
There’s been a fair bit of reflection on the landmark law across blogs and comment pages, but in aggregate it adds little to the swathes of analysis that came out 12 months ago. For as the chart below from Davis Polk shows, the majority of the rules still need to be written (click to expand). And the next quarter looks set to be a busy one.
Sure, we know the basics and banks have already begun to proactively respond — raising capital, shutting down prop desks, etc. — but it’s hard to know where they’ll end up, as intense lobbying of Congress and regulators continues in Washington. On balance, this blogger thinks Dodd-Frank does a bit more good than bad, but as ever the details surround the devil.
Just in case you do want to take this arbitrary opportunity to review Dodd-Frank, however, we’ve provided a few links in the paragraph below. There will be more out there but this should give a flavour of what people are saying.
Professors at NYU have continued their excellent work tracking the Act, publishing a free e-book replete with reflection and analysis. There’s more of that in the FT, where the US banking and markets editors have penned an elegant survey. There’s less of that in Politico, which asked some of the key participants to state their (intransigent) cases. Partly because of this continuing acrimony, Harvard professor Hal Scott writes in the FT that there is little to celebrate one year on. Roya Wolverson in Time concurs, arguing that little has changed. Tim Geithner disagrees, of course. (As does Barney Frank, of course.) And for a dry, sober, legal account, check out the aforementioned Davis Polk’s book, to be published on Friday. (Their summary, published last year, is still essential reading for DFA newbies.)
Happy birthday Dodd-Frank, hope your teething problems aren’t too bad.
(Seriously, stop it — Ed.)
Related link:
Dodd-Frank coverage – FT Alphaville