White papers addressing the Dodd-Frank Act and the resulting changes to the global financial regulatory landscape.
Federal Reserve Bank Governance: Opportunities Exist to Broaden Director Recruitment Efforts and Increase Transparency
One of the mandates of the Dodd-Frank Act was that the Government Accountability Office (GAO) review the governance structure of U.S. Federal Reserve Banks. This report:
- "analyzes the level of diversity on the boards of directors and assesses the extent to which the process of identifying possible directors and appointing them results in diversity on the boards",
- "evaluates the effectiveness of policies and practices for identifying and managing conflicts of interest for Reserve Bank directors," and
- "compares Reserve Bank governance practices with the practices of selected organizations."
Opportunities Exist to Strengthen Policies and Processes for Managing Emergency Assistance
Title XI of the Dodd-Frank Act mandated that the GAO conduct a one-time audit of the Federal Reserve's emergency loan programs during the crisis period of 2007-09. The audit objectives included a review of:
- the basis and purpose for its authorization, as well as accounting and financial reporting internal controls;
- the use, selection, and payment of vendors;
- management of conflicts of interest;
- policies in place to secure loan repayment; and
- the treatment of program participants.
To view the entire document, along with a summary of the GAO recommendations, click the tab below.
July 14, 2011
From the white paper:
"The amount of new funding the agencies reported as associated with implementing the Dodd-Frank Act varied significantly across the 11 agencies. For example, new funding resources related to Dodd-Frank responsibilities during the years 2011–2012 ranged from a low of $0 for FTC to a high of around $329 million for CFPB. Funding resources to implement the Dodd-Frank Act accounted for at least 25 percent of the agency’s total budget increase at 9 of the 11 agencies in the most recent year for which data were available. Excluding the three agencies that the Dodd-Frank Act created (CFPB, FSOC, and OFR), the CFTC devoted the highest share of total agency resources (25 percent) to implementing the Dodd-Frank provisions. Agencies reported that most of the costs related to implementing the provisions will be recurring."
July 12, 2011
Summary of key points from the white paper:
- Operational challenges and requirement of sizeable re-engineering of operational and technology infrastructure.
- Increase in connectivity points - multiple clearing members, swap execution facilities (SEFs) and swap data repositories (SDRs) - will increase market volume and complexity.
- Market participants should expect significant impact on margin and collateral management and should preemptively establish cross-product margining with their core bank counterparties.
- Valuation needs will also change as there will be potential requirements for daily valuations of non-cleared trades, harmonization and validation of marks.
- Trade, position and risk reporting with regulators is expected to broaden and intensify.
- Swap participants may have additional monitoring, compliance and reporting responsibilities,even if they are exempted from central clearing. Citi estimates that about 60% of the current OTC derivatives market by volume will be centrally cleared.
- Traditional derivatives intermediation (prime brokerage services) will likely continue in the near term and be complementary to CCP clearing.
April 15, 2011
This 32 page report, officially called "An Investigation Regarding Cost-Benefit Analyses Performed by the Commodity Futures Trading Commission in Connection with Rulemakings Undertaken Pursuant to the Dodd-Frank Act," and is a cost-benefit analysis of the Dodd-Frank Act. The report, commissioned by Representative Frank Lucas, chairman of the House Committee on Agriculture and Representative K. Michael Conaway, chairman of the Subcommittee on General Farm Commodities and Risk, examined four rule filings by the Commodity Futures Trading Commission.
In response to the financial crisis of 2008, Goldman Sachs Global Markets Institute (GMI) published a series of white papers that offered a thorough analysis the crisis. The five part series addressed the reasons behind the market meltdown, a brief history of the events leading to the crisis, and gave its recommendations as to the step that should be taken so as to avoid a repeat of such a crisis.
Boston Consulting Group, March 10, 2011
In accordance with a mandate from the Dodd-Frank Act, the U.S. Securities and Exchange Commission (SEC) was required to hire an independent consultant to examine the exchange's structure and operations, and make assessments of areas in need of reform. The SEC selected Boston Consulting Group (BCG) to conduct the study. After conducting 425 discussions with present and former exchange officials, regulators, and industry groups, the consultant presented its results on March 10, 2010.
Global Investment Banks, March 8, 2011
In response to the impending Dodd-Frank regulatory changes in the U.S, J.P. Morgan Cazenove Global Equity Research conducted a study on the likely impact of such regulatory reform on investment banks (IBs) and credit banks. The study combines the company's three-part series on regulatory arbitrage with additional research on such topics as executive compensation, proprietary trading, and the Basel 3 regulatory framework. It concludes with its investment banking "pecking order" and the rationale behind its preferences.
Booz Allen Hamilton, Summer 2010
Rules and Studies Mandated by the Dodd-Frank Act, Summer 2010
This publication summarizes the changes to take place, including descriptions and timelines within each of 19 existing and newly-created federal agencies.
State Street's Vision Series, May, 2011
This publication offers an overview of the changes to European asset managers' business structure and strategy in this era of regulatory change. The study contrasts the past regulatory landscape, which centered on market efficiency, with the current focus of investor protection. For example:
The paper speculates as to the "winners and losers" of the regulatory reform and the impact of U.S. regulations on Europe. It concludes with a table of European regulations, the current status of each regulation, and the entities who will be impacted.