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September 13, 2011


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Kim Krawiec

Success at last! We've been trying to get you to empty the rest of that half-full glass since the signing, more or less. Only joking -- it can't be that bleak. But I agree with you that D-F should have tried to do less and do it better.

Kim Krawiec

oh and p.s. -- great title.

Erik Gerding

I usually don't like to wade into politics on the blog, but I think you hit a really important point, Brett, about the current ideological climate. Frankly, I don't recognize traditional Republican concerns about institutions in the current political dialogue. Threatening the Federal Reserve Chairman (who ain't no bleedin' heart)?

Moreover, the debate about public employee unions has the collateral effect of making the public sector look a lot less like an attractive (let alone a noble) calling.

Erik Gerding

Kim: If Dodd-Frank tried to do less, it would have been wittled down even further. I respect calls that Dodd-Frank should have been more carefully crafted, but there is the political reality of the issue attention cycle and the likelihood that more modesty would have meant the industry would be deeper into the "red zone" in the rollback fight now.

Kim Krawiec

Maybe you're right Erik. I just don't think that enough thought went into some of the provisions. My (perhaps naive) hope was that by focusing on the most serious issues exposed by the crisis, we could have had better legislation. But I take your point -- less for congress to focus on would also mean an ability of special interest groups to concentrate their efforts.

Brett McDonnell

My comment was intended to be somewhere in between Erik and Kim. I actually think that most of the Act is aimed at serious problems, and takes a plausible stab at addressing those problems. There are exceptions, but much less than one would expect under the circumstances. That is why I have so far largely defended Dodd-Frank. But my doubts are whether our agencies have the capacity to carry out all the new regulations and enforcement needed. Derivative exchanges are a worthy idea, but a lot of work. Ditto the Volcker Rule. Ditto the CFPB. Ditto new hedge fund rules. Ditto the 5% risk retention rule for asset-backed securities. All individually valuable, all plausible responses to the crisis, all ideas which agencies might be able to put into action on their own. I think that Congress dealt with each of these issues, and a number of others, roughly as well as it could. I just now wonder whether the whole is less than the sum of the parts, with so much going on that the agencies don't have the resources to implement any of these ideas well.

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