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The New Financial Deal

Understanding the Dodd-Frank Act and Its (Unintended) Consequences
1. Aufl.

von: David Skeel, William D. Cohan
22,99 €
Verlag:	Wiley
Format:	EPUB
Veröffentl.:	29.11.2010
ISBN/EAN:	9781118014929
Sprache:	englisch
Anzahl Seiten:	240

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Titelbeschreibung

The good, the bad, and the scary of Washington's attempt to reform Wall Street The Dodd-Frank Wall Street Reform and Consumer Protection Act is Washington's response to America's call for a new regulatory framework for the twenty-first century. In The New Financial Deal, author David Skeel offers an in-depth look at the new financial reforms and questions whether they will bring more effective regulation of contemporary finance or simply cement the partnership between government and the largest banks. <ul> <li>Details the goals of the legislation, and reveals that how they are handled could dangerously distort American finance, making it more politically charged, less vibrant, and further removed from basic rule of law principles</li> <li>Provides an inside account of the legislative process</li> <li>Outlines the key components of the new law</li> </ul> To understand what American financial life is likely to look like in five, ten, or twenty years, and how regulators will respond to the next crisis, we need to understand Dodd-Frank. The New Financial Deal provides that understanding, breaking down both what Dodd-Frank says and what it all means.

Inhaltsverzeichnis

Foreword ix Introduction xi A Few Major Characters xv Chapter 1 The Corporatist Turn in American Regulation 1 The Path to Enactment 3 The Two Goals of the Dodd-Frank Act 4 A Brief Tour of Other Reforms 6 Two Themes That Emerge 8 Fannie Mae Effect 11 Covering Their Tracks 12 Is There Anything to Like? 14 Part I Relearning the Financial Crisis Chapter 2 The Lehman Myth 19 The Stock Narrative 20 Lehman in Context 23 Lehman’s Road to Bankruptcy 26 Lehman in Bankruptcy 29 Bear Stearns Counterfactual 31 Road to Chrysler 33 Chrysler Bankruptcy 35 General Motors “Sale” 38 From Myths to Legislative Reality 39 Part II The 2010 Financial Reforms Chapter 3 Geithner, Dodd, Frank, and the Legislative Grinder 43 The Players 44 TARP and the Housing Crisis 47 Road to an East Room Signing 49 Channeling Brandeis: The Volcker Rule 54 The Goldman Moment 56 Chapter 4 Derivatives Reform: Clearinghouses and the Plain-Vanilla Derivative 59 Basic Framework 61 Derivatives and the New Finance 63 The Stout Alternative 66 New Clearinghouses and Exchanges 68 Regulatory Dilemmas of Clearinghouses 69 Disclosure and Data Collection 74 Making It Work? 75 Chapter 5 Banking Reform: Breaking Up Was Too Hard to Do 77 Basic Framework 78 New Designator and Designatees 79 Will the New Capital Standards Work? 82 Contingent Capital Alternative 84 Volcker Rule 85 What Do the Brandeisian Concessions Mean? 91 Office of Minority and Women Inclusion 93 Institutionalizing the Government-Bank Partnership 94 A Happier Story? 95 Repo Land Mine 96 Chapter 6 Unsafe at Any Rate 99 Basic Framework 100 Who is Elizabeth Warren? 102 Toasters and Credit Cards 105 The New Consumer Bureau 106 Mortgage Broker and Securitization Rules 109 Consequences: What to Expect from the New Bureau 111 What It Means for the Government-Bank Partnership 114 Chapter 7 Banking on the FDIC (Resolution Authority I) 117 Does the FDIC Play the Same Role in Both Regimes? 118 How (and How Well) Does FDIC Resolution Work? 122 Moving Beyond the FDIC Analogy 126 Chapter 8 Bailouts, Bankruptcy, or Better? (Resolution Authority II) 129 Basic Framework 130 The Trouble with Bailouts 132 Who Will Invoke Dodd-Frank Resolution, and When? 135 Triggering the New Framework 137 Controlling Systemic Risk 142 Third Objective: Haircuts 145 All Liquidation, All the Time? 148 Part III The Future Chapter 9 Essential Fixes and the New Financial Order 155 What Works and What Doesn’t 156 Staying Derivatives in Bankruptcy 158 ISDA and Its Discontent 163 Other Bankruptcy Reforms for Financial Institutions 168 Plugging the Chrysler Hole in Bankruptcy 170 Bankruptcy to the Rescue 173 Chapter 10 An International Solution? 175 Basic Framework 176 Problems of Cross-Border Cases 177 Scholarly Silver Bullets 181 Dodd-Frank’s Contribution to Cross-Border Issues 182 New Living Wills 185 A Simple Treaty Might Do 186 Risk of a Clearinghouse Crisis 188 Reinvigorating the Rule of Law 189 Conclusion 191 Notes 195 Bibliography 205 Acknowledgments 211 About the Author 212 Index 213

Autorenportrait

DAVID SKEEL is the S. Samuel Arsht Professor at the University of Pennsylvania Law School. He is author of Icarus in the Boardroom: The Fundamental Flaws in Corporate America and Where They Came From; Debt's Dominion: A History of Bankruptcy Law in America; and numerous articles on bankruptcy, corporate law, and other topics. His commentary has appeared in the New York Times, Wall Street Journal, Weekly Standard, Books & Culture, and elsewhere.

Back cover copy

The New Financial Deal UNDERSTANDING THE DODD-FRANK ACT AND ITS (UNINTENDED) CONSEQUENCES After watching the government bail out Bear Stearns and AIG in 2008, and pump well over one hundred billion dollars into Citigroup, Bank of America, and the other largest banks the same year, Americans realized that the existing regulatory framework did not work. The Dodd-Frank Act, which President Obama signed into law in July 2010, was Washington's answer. The legislation created an entirely new set of rules for both the instruments and the institutions of contemporary finance. Although the reforms were desperately needed, they were drafted by the same people who designed the bailouts of 2008, and it shows. In The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended) Consequences, David Skeel explains where the legislation came from, tracing its assumptions back to the 2008 crisis and offering an inside account of the key moments in the legislative process. He analyzes each of the main components of the Dodd-Frank Act, explaining how they will work and showing that the new regulatory framework depends on precisely the qualities that Americans found so offensive about the bailouts of 2008: special treatment of the largest financial institutions and ad hoc intervention in the event of trouble. Skeel's assessment is not entirely pessimistic, however. He argues that a few features of the Dodd-Frank Act are genuine improvements, such as its regulation of financial derivatives, and he outlines several simple bankruptcy reforms that would curb the worst excesses of the new partnership between the government and the largest financial institutions.