The Liquidity Crisis and Government Reaction

2019 ◽  
pp. 13-24
Author(s):  
Alan N. Rechtschaffen
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Consumer Protection ◽  
Federal Agencies ◽  
Wall Street ◽  
President Obama ◽  
Consumer Protection Act ◽  
Wide Range ◽  
Emergency Economic Stabilization Act ◽  
Economic Stabilization

This chapter begins with a discussion of the buildup to the crisis and the background of the Dodd-Frank Act. On July 21, 2010, President Obama signed the Wall Street Reform and Consumer Protection Act (WSRCPA), widely known as the “Dodd-Frank Act,” a massive piece of financial legislation encompassing a wide range of reforms intended to stabilize financial markets through enhanced oversight, reduction of risk, and improved consumer protection. Its 2,200 pages direct enactment of over 200 new or expanded regulations by federal agencies. The remainder of the chapter covers the Federal Reserve's provision of liquidity and stabilization of financial markets, and regulatory reaction at the height of the financial crisis (Emergency Economic Stabilization Act (EESA) and American Recovery and Reinvestment Act (ARRA)).

Regulation of Swaps

2019 ◽  
pp. 249-286
Author(s):  
Alan N. Rechtschaffen
Keyword(s):  
Financial Crisis ◽  
Financial Institutions ◽  
Consumer Protection ◽  
Federal Reserve ◽  
Regulatory Regime ◽  
Wall Street ◽  
Regulatory Oversight ◽  
Consumer Protection Act ◽  
Reporting Requirements ◽  
Derivatives Markets

Former Federal Reserve Chairman Ben S. Bernanke classified derivatives as a “vulnerability” of the financial system that led to the financial crisis. He explained that derivatives concentrated risk within particular financial institutions and markets without sufficient regulatory oversight. The Wall Street Reform and Consumer Protection Act—Dodd-Frank—constituted a seismic shift in the regulation of financial institutions and markets in a massive effort to address regulatory shortcomings in derivatives markets. This chapter discusses the Dodd-Frank regulatory regime. Topics covered include the Dodd-Frank and derivatives trading; jurisdiction and registration; clearing, exchange, capital and margin, and reporting requirements; analysis of the provisions of Dodd-Frank on derivatives trading; rationale behind the exemptions and exclusions; the Lincoln Rule; Futures Commission Merchants; and criticisms of Dodd-Frank's derivatives trading provisions.

scholarly journals Volcker Rule in Practice

2020 ◽  
Vol 2020 (2) ◽  
Author(s):  
Jordan Schiff
Keyword(s):  
Financial Crisis ◽  
Consumer Protection ◽  
Financial Reform ◽  
Direct Impact ◽  
Wall Street ◽  
Bilateral Exchange ◽  
Consumer Protection Act ◽  
Private Citizens ◽  
Proprietary Trading ◽  
Volcker Rule

Established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Volcker Rule’s restriction of banks and financial companies from participating in proprietary trading was conceived of as a response to the systemic institutional failures that are commonly noted to be partially responsible for the financial crisis of 2008. Over its short and contentious lifetime, the Rule has been widely praised by some as a necessary step toward limiting unsustainably risky corporate investment practices, and widely vilified by others as being poorly drafted, impracticably restrictive, and only tenuously connected to the crisis precipitating its enactment. The conspicuous disunity among participants in this discussion reflects, in part, the difficulty of measuring the direct impact that the Volcker Rule has had since its enactment, particularly given the complexity of the investment activities the Rule attempts to regulate and the dearth of conclusive statistics indicating which phenomena are accurately attributable to the Rule’s interference. Through a survey and analysis of the public’s input and assessment of the Volcker Rule and its more recent development, this Note explores how administrative processes have fared in giving an adequate voice to the various viewpoints of affected private citizens, businesses, and public entities. Ultimately, this Note argues that the Volcker Rule’s surprisingly modest evolution to date is overshadowed by charged rhetoric, vast information gaps, and unbalanced regulatory feedback rather than substantive bilateral exchange—a phenomenon frustratingly typical of the democratic processes in the context of complex financial reform. This Note concludes by offering reflections on the Volcker Rule’s evolution to date and what the data examined has to say about the successes and shortcomings of the lawmaking processes driving that evolution forward.

scholarly journals Assessing The Markets Reaction To The Dodd-Frank Act

2012 ◽  
Vol 10 (10) ◽  
pp. 569 ◽  
Author(s):  
George Turk ◽  
Philip Swicegood
Keyword(s):  
Financial Markets ◽  
Consumer Protection ◽  
Market Reaction ◽  
Positive Response ◽  
Legislative Process ◽  
Wall Street ◽  
Developed Markets ◽  
Consumer Protection Act ◽  
The One

In this paper, we exam how the financial markets reacted to the emergence of the Dodd-Frank Wall Street Reform and Consumer Protection Act as it developed through the legislative process from policy concept to signed law. We find that investors, on the one hand, desired clarity and sustainable oversight of market activities, but simultaneously feared the possibility of over-burdensome regulation. As the legislative process developed, markets cheered any watering down of perceived over-restrictive provisions with a positive response. We also empirically noted the smaller banks stocks were generally unaffected by the entire emergence of Dodd-Frank, with nearly all of the market reaction (positive and negative) occurring with larger banks stocks.

Difficulties of the Financial Reform in the USA

2013 ◽  
pp. 147-158
Author(s):  
V. Kulakova
Keyword(s):  
Economic Policy ◽  
Consumer Protection ◽  
Financial Regulation ◽  
Financial Reform ◽  
Wall Street ◽  
Political Sciences ◽  
Consumer Protection Act ◽  
The Usa ◽  
Major Factors ◽  
International Financial Regulation

We study the reform of financial regulation initiated by the Dodd—Frank Wall Street Reform and Consumer Protection Act of 2010. Major factors impeding Obama’s financial and economic policy are explored, including institutional difficulties, party warfare, lobbyism, and systemic inconsistencies of international financial regulation. We also examine challenges that are being faced by economic and political sciences due to the changes in financial regulation and also assess the level of radicality of the financial reform.

scholarly journals Comments by the Auditing Standards Committee of the Auditing Section of the American Accounting Association on the Securities and Exchange Commission Proposed Rules for Implementing the Whistleblower Provisions of Section 21F of the Securities Exchange Act of 1934

2011 ◽  
Vol 5 (1) ◽  
pp. C16-C27 ◽  
Author(s):  
Eileen Taylor ◽  
James Bierstaker ◽  
Joseph Brazel
Keyword(s):  
Consumer Protection ◽  
Securities And Exchange Commission ◽  
Wall Street ◽  
Administrative Action ◽  
Consumer Protection Act ◽  
Auditing Standards ◽  
Securities Laws ◽  
Original Information

SUMMARY: Recently, the Securities and Exchange Commission (“SEC” or “Commission”) proposed rules and forms to implement Section 21F of the Securities Exchange Act of 1934 (“Exchange Act”), entitled Securities Whistleblower Incentives and Protection, and sought comment thereon. The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted on July 21, 2010 (“Dodd-Frank”), established a whistleblower program that requires the Commission to pay an award, under regulations prescribed by the Commission and subject to certain limitations, to eligible whistleblowers who voluntarily provide the Commission with original information about a violation of the federal securities laws that leads to the successful enforcement of a covered judicial or administrative action, or a related action. Dodd-Frank also prohibits retaliation by employers against individuals that provide the Commission with information about potential securities violations. Comments were requested by the Commission and could be submitted on or before December 17, 2010. The Auditing Standards Committee of the Auditing Section of the American Accounting Association provided the comments in the letter below to the Commission on the Proposed Rules for Implementing the Whistleblower Provisions of Section 21F of the Securities Exchange Act of 1934.

Clogged systems and toxic assets

2011 ◽  
Vol 10 (1) ◽  
pp. 29-49 ◽  
Author(s):  
Jennifer R. Horner
Keyword(s):  
House Of Representatives ◽  
Public Discourse ◽  
The United States ◽  
United States Congress ◽  
Wall Street ◽  
Federal Funds ◽  
The Public ◽  
Emergency Measure ◽  
Emergency Economic Stabilization Act ◽  
Economic Stabilization

The Emergency Economic Stabilization Act, also known as the “Wall Street Bailout,” authorized the allocation of $700B US to address the financial crisis of 2008. The “bailout” did not pass easily; members of the United States Congress reported feedback from angry constituents urging them to vote against it, and the measure failed its first vote in the House of Representatives. This essay focuses on metaphors used in public discourse to describe the “bailout” in the ten days between its introduction to Congress and its failure in the House. Advocates of the economic stimulus plan relied on metaphors that evacuated human agency, portraying the plan as an emergency measure necessitated by crises such as illness, natural disasters, and mechanical failures. Opponents to the plan extended and modified the administration’s metaphors to communicate a critique of the transfer of federal funds to private entities for the good of the public.

scholarly journals How Do You Qualify as a Whistleblower Under The Dodd-Frank Act? Blowing the Whistle on a Circuit Split

2018 ◽  
Vol 36 (2) ◽  
pp. 101-130
Author(s):  
Hugo S. W. Farmer
Keyword(s):  
Supreme Court ◽  
Consumer Protection ◽  
Statutory Interpretation ◽  
Wall Street ◽  
Group V ◽  
Consumer Protection Act ◽  
The Supreme Court ◽  
Definition Of

            Recently, a circuit split has arisen with regard to the Dodd-Frank Wall Street Reform and Consumer Protection Act. The circuit split concerns the question of what it takes for an individual to qualify as a “whistleblower” under the terms of the statute. This circuit split is surprising, as the Dodd- Frank Act purports to answer this question itself by providing a definition of this term, a definition which the Fifth Circuit has treated as being conclusive. Nonetheless, the Second and the Ninth Circuits have held that with respect to some, but not all, of the Dodd-Frank Act, this statutory “whistleblower” definition does not apply. Shortly, the Supreme Court will have the opportunity to resolve the matter when it hears an appeal of the Ninth Circuit’s decision in Somers v. Digital Realty Trust Inc. This article provides three broad reasons why the Supreme Court should reject the Second and Ninth Circuits’ interpretations. First, the interpretation endorsed by the Second and Ninth Circuits is the result of a flawed exercise in statutory interpretation that incorrectly applies principles recently set down by the Supreme Court in King v. Burwell, and Utility Air Regulatory Group v. EPA. Secondly, while the Second and Ninth Circuits rejected the Fifth Circuits’ interpretation on the basis that it withholds the protection of the Dodd-Frank Act from auditors and attorneys, the Second and Ninth Circuits’ preferred interpretations also fail to protect auditors and attorneys. Finally, the policy reasons in favor of extending the Dodd-Frank Act’s whistleblower protections to auditors and attorneys are insufficiently strong to warrant departing from the natural meaning of the statutory language at issue.   

scholarly journals Who Determines Customer Property

2020 ◽  
Vol 2020 (2) ◽  
Author(s):  
Mariel Mok
Keyword(s):  
Consumer Protection ◽  
Deposit Insurance ◽  
Investor Protection ◽  
Wall Street ◽  
Consumer Protection Act ◽  
The Government ◽  
Federal Deposit Insurance ◽  
Federal Deposit Insurance Corporation

Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act gives the government the Orderly Liquidation Authority (“OLA”) to seek the liquidation of failing financial companies with the appointment of the Federal Deposit Insurance Corporation (“the FDIC”) as receiver. When applied to securities broker-dealers, the OLA calls into question the incorporation of the Securities Investor Protection Act of 1970 (“SIPA”) that provides for the orderly liquidation of an insolvent broker-dealer under the oversight of the Securities Investor Protection Corporation (“the SIPC”). The result is a conflict of control between the FDIC and the SIPC in the event of an OLA broker-dealer liquidation and investor uncertainty regarding the incorporation of SIPA protections for customer property. Problematically, the OLA and its implementing rules leave the FDIC with discretion to modify SIPA protections for customer property.

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