Repealing Dodd-Frank: What’s Next for Derivatives and Securities Finance
Finadium
January 2017
The November 2016 US election has brought uncertainty to a wide range of economic and financial activity, not least of which is the future of Dodd-Frank. US banks have had six years to adjust to Dodd-Frank’s sweeping new rules on the banking industry, from OTC derivatives to retail banking to credit cards. Now, US Republicans are promising to repeal parts of this regulation.
This Finadium report evaluates a tangible proposal currently on the table for repealing many of Dodd-Frank’s rules impacting bank balance sheets: the Financial CHOICE Act. Initially released in 2016, the Act provides the greatest substance yet on Republican plans to reduce, repeal or reevaluate both domestic and global capital rules that apply to the US. While the headline news is an elimination of OTC derivatives rules in exchange for a 10% Leverage Ratio, underneath this thinking is a range of alternatives that would free banks to engage in more derivatives and securities financing activities.
This report is part of the Finadium Investor Focus series. It breaks down the key points of Dodd-Frank repeal and presents ideas for future implications. This report should be read by any financial markets participant with interests in OTC derivatives, collateral management and securities finance.
This report is 12 pages with one exhibit.
TABLE OF CONTENTS
■ Executive Summary
■ The Case Against Dodd- Frank
■ The Financial CHOICE Act: Watch the Leverage Ratio
– Other Targeted Financial Services Regulations and Agencies
■ Probable Scenarios
■ About the Author
■ About Finadium