IFLR’s guide to Dodd-Frank

Author: IFLR Correspondent | Published: 4 May 2014
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President Obama signs the Dodd-Frank Act into law

When the Dodd-Frank Act was passed in 2010 it represented a historic shift in financial regulations, not only for the US, but globally. 

The attempt to repair the financial system following the 2008 crash included extraordinary measures that changed how financial institutions could operate.

All of the US’s financial regulators have played a part in drafting some regulation that stems from it. The inter-agency rule making has been a slow and drawn out process resulting in many lengthy and unclear regulations. A prime example is the Volcker Rule, which took three years to complete and has a 892 page preamble.

The extent to which Dodd-Frank has affected global regulators and foreign banks is still unclear as rules continue to develop. Agreements between regulators have helped ease the burden in some instances, but restrictive over the counter swap rules and high liquidity ratios still impart a global burden.

As the regulation and its effects continue to evolve IFLR’s archive will offer links to coverage of the latest developments.

RULE IMPLEMENTATION

Dodd-Frank's push-out provision: the next steps

Banks look at steps to restructure or sell off their commodity arms in order to prepare for a Dodd-Frank rule requiring them to 'push-out’ elements of their derivatives businesses.

The winners and losers under US Basel III

The Federal Reserve's June 12 proposal of rules implementing Basel III create a dubious future for US banks regarding Tier 1 contingent convertible capital (Cocos), a battle on risk weightings, and capital raising problems for small banks

Fed's Basel III: global harmonisation wins approval

The Federal Reserve's proposed rules implementing Basel III represent the biggest post-crisis step towards a harmonised global capital framework. US lawyers have welcomed the move

What prudential rules mean for foreign banks in US

The final version of Section 165 increases mandates for large foreign banks in the US to set up intermediate holding companies.

Holistic medicine needed to revive securitisation

Increased disclosure requirements and higher regulatory standards have dampened the securitisation market.

Former SEC counsel: whistleblower programme shortcomings

Protections drafted in Dodd- Frank create problems for implementation.

What recent Dodd-Frank guidance signals for structured finance

The expanded definition of 'commodity pool' raises issues for financial institutions

Banks confident over innovative hybrids

In 2010 despite uncertainty over the future of regulatory capital rules, banks were confident innovative hybrids would provide core capital for financial institutions.

Obama’s signature is just the start

In July 2010 President Obama signed the Dodd-Frank act into law

Bank liquidity ratio clashes with shareholder demands

The new liquidity ratio should lower banks risk exposure but shareholder demand for strong returns could lead to a clash of interests. 

VOLCKER

The Volcker Rule – a many-headed hydra

Following implementation of the Volcker Rule, banks discovered that they faced a number of surprising challenges when structuring their trading activities.

Volcker’s biggest losers explained

Community banks and foreign banks face an uphill battle in Volcker implementation.

The Volcker Rule

The complexity of the Volcker Rule ensures it will effect nearly every financial institution.

Volcker Rule: the market reacts

The final version of the rule is met with relief following a long wait and concerns it would be more stringent.

Volcker calls for faster rulemaking

The rule has been an example of how inter agency rule making can stall the regulatory process.

Why securitisers could be swept into the Volcker Rule

Early predictions of the regulation raised concern it could restrict all securitisation activity.

TITLE VII: OTC SWAPS

The futurisation of swaps: what’s expected

The increased regulatory burdens on swaps leaves them looking more like futures and sparks a re-examination of how the instrument is used.

Structuring swaps in line with US anti-evasion rules

The do’s and don’ts of swap compliance under Dodd-Frank

Dodd-Frank Act: Title VII - reaching out on swaps

The extraterritorial reach of swap regulation raises problems for traders and regulators.

Bumps on the EU/US Path Forward

Under Dodd-Frank, the CFTC is authorised to exempt comparably regulated foreign derivative clearing organisations, but they have to decide what is comparable

US/EU swaps Path Forward: the outstanding questions

US and EU reach an agreement to scales back the extraterritorial reach of CFTC rules regarding swap trading.

ISDA derivatives protocol faces implementation challenge

Adding new clauses into derivatives contract could be the last step to addressing 'too-big-to-fail’, but nationally focused legislation is now enough to address international swaps.

US derivatives regulation consolidates clearing

US regulation to expand the number of dealers in the derivative trading space is backfiring and consolidating clearing space. 

FOREIGN BANKS

What European banks can learn from US stress tests

As regulatory regimes become more global, European banks can take away several lessons from US stress testing outcomes.

US prudential rules to change Asian banks’ expansion plans

Asian banks may rethink plans to expand into the US because of Dodd-Franks compliance concerns.

US: Will reforms balkanise banking?

Prudential standards in the US could fragment the global market.

How US 5% leverage ratio could catch foreign banks

A leverage ratio higher than Basel III in the US could prompt other global regulators to increase their requirements.

Are you a US person?

A look at how the Dodd-Frank act addresses who is a foreign person, for trading purposes

Why Dodd Frank extraterritoriality is fundamentally flawed

CFTC substituted compliance provision for swap trading is out of sync with Asian market structure

Basel and Dodd-Frank clash over definitions

From the beginning global regulators clashed over bank capital requirements

How US 5% leverage ratio could catch foreign banks

Speculation is growing over whether US proposals for a leverage ratio that doubles the Basel III standard will embolden European regulators’ approach to the incoming capital requirement