Kroll Bond Rating Agency Releases Report: “Thinking About Dodd-Frank Reform”

NEW YORK--()--Kroll Bond Rating Agency (KBRA) has released a new research report entitled “Thinking About Dodd-Frank Reform.” The report makes the following key points:

  • KBRA opined last November ("Will the CHOICE Act be the First Trump Reform Legislation?") that our view of the likely reform agenda includes congressional passage of the Financial CHOICE Act sponsored by House Financial Services Committee Chairman Jeb Hensarling (R-TX). That view has not changed.
  • Regarding changes to the Volcker Rule, KBRA believes that the basic goal of the Volcker Rule remains sound, but needs to be amended. First, the administrative requirements of the Volcker Rule are byzantine and should be greatly simplified as part of a larger review of rules regarding liquidity and other Dodd-Frank and Basel II regulations. Second, for reasons related to market liquidity, the restrictions of the Volcker Rule should be confined to the depository. Affiliates of bank holding companies such as broker-dealers and funds should be allowed to trade for their own accounts.
  • Regarding Dodd-Frank Act’s Orderly Liquidation Authority (OLA), KBRA believes that, as with the Volcker Rule, the big problem with the OLA is the overhead involved in compliance, including living wills and other onerous regulatory requirements. As KBRA has noted previously, the Federal Deposit Insurance Corporation is under no requirement to utilize living wills in resolving a large financial institution under Dodd-Frank. While the legal authority to take over a troubled financial institution is very important to avoiding a repeat of the Lehman Brothers debacle, the FDIC and other regulators should do any planning unilaterally and in private.

To view the report click here.

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About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Contacts

Analytical:
Kroll Bond Rating Agency
Chris Whalen, 646-731-2366
Senior Managing Director
cwhalen@kbra.com
or
Follow us on Twitter!
@KrollBondRating

Contacts

Analytical:
Kroll Bond Rating Agency
Chris Whalen, 646-731-2366
Senior Managing Director
cwhalen@kbra.com
or
Follow us on Twitter!
@KrollBondRating