Could US-style Liikanen reform work?

Author: Michael Washburn | Published: 16 Oct 2012

Following US Republican Presidential nominee Mitt Romney’s pledge to repeal the Dodd-Frank Act, if elected, speculation has grown as to whether US-style Liikanen reforms could feasibly replace Volcker. But US lawyers are skeptical.

In an October 3 Presidential debate, Romney made clear his intentions to replace Dodd-Frank with a streamlined framework of financial regulation that would be simpler and less burdensome for banks.

Lawyers in the UK believe US institutions would be receptive to the reforms suggested this month by the EU Liikanen Commission, which include separating risky trading activities from banks’ deposit-taking function, and new rules on capital reserves and bonuses.

But Bingham McCutchen partner James Rockett said even the Dodd-Frank bill had been enacted prematurely, without proper analysis of what...