NEW YORK--(Dodd-Frank Wall Street Reform and Consumer Protection Act up for final vote in the Senate.)--NYU Stern faculty are available to provide commentary on the
Consumer Protection Agency – Professors Vicki Morwitz and Robert Whitelaw
The proposed legislation focuses on some more vulnerable consumer segments such as the elderly. It takes steps to ensure that the regulations will not inadvertently limit the availability of financial products and services to traditionally neglected consumer segments and markets, and allows industry input on any new regulations to ensure the regulations are fair to financial firms. The bill notably excludes auto dealers (car loans) and insurance companies (annuities).
The Future of the Fed – Professors Thomas Cooley, Richard Sylla and Paul Wachtel
Some of the legislative changes will make it more difficult for the Fed to address a crisis in a timely way, particularly the new set of limits placed on the Fed's emergency lending powers. The authors prefer a procedure that achieves political accountability for the Fed while maintaining its ability to make timely interventions in the interest of financial and economic stability.
Transparency in the Derivatives Market – Professors Viral Acharya and Marti Subrahmanyam
The Bill is a giant step forward to improving the regulation of OTC derivatives, but several smaller steps in implementation remain to be taken. Effective functioning of the OTC markets should rely more on transparency and less on rules designed by regulators.
Hedge Fund Regulation – Professor Stephen Brown
Distinguishing hedge funds from mutual funds and ETFs as entities that may need to be treated as systemic institutions and regulated is reasonable, yet, the US legislation would benefit from a lighter regulatory approach that is more focused on those hedge funds most likely to create systemic risk. The US legislation would also benefit from a broader regulatory approach that extends operational disclosure to a larger fraction of hedge funds.