Dodd-Frank Wears the Bull’s-Eye on G.O.P. Campaign Trail

[SecularMotion]

Source: NY Times

WASHINGTON — On the stump, words like “Obamacare” roll off the tongue. “Swap execution facility,” not so much.

That has not stopped Republican presidential candidates from using the Dodd-Frank Act, the sprawling regulatory effort to address the causes of the financial crisis, as their newest anti-Obama target for what ails the economy.

Republicans have repeatedly invoked the law’s 848-page girth — and its rules on, among other things, trading derivatives and swaps — as a symbol of government overreach that is killing jobs.

But in trying to turn Dodd-Frank into the new “Obamacare,” the disparaging term that opponents use to refer to the new health care law, Republicans are largely ignoring the basic trade-off that the financial law represents, supporters say.

Read more: http://www.nytimes.com/2011/09/21/business/dodd-frank-act-is-a-target-on-gop-campaign-trail.html?_r=1&hp

[ProSense]

1. UBS Scandal Is a Reminder About Why Dodd-Frank Came to Be

UBS Scandal Is a Reminder About Why Dodd-Frank Came to Be

Although the UBS trading scandal happened at the London office of a Swiss financial company, big American banks will feel regulatory heat.

When UBS revealed on Thursday that a rogue trader had lost a quantity of money so large that it potentially wiped out profits for the entire quarter, the case cast a glaring spotlight on banks’ risk-taking activities and evoked painful memories of the financial crisis. Such blowups had helped bring the system to the brink, forcing governments to bail out banks and prompting a global economic slowdown.

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In the coming weeks, policy makers are expected to propose new regulations intended to limit federally insured banks from making bets with their own money, according to a government official with knowledge of the process. The rules — part of the Dodd-Frank Act, the regulatory overhaul enacted in the wake of the crisis — take aim at a practice called proprietary trading, in which companies speculate for their own gains rather than for their customers’.

While the industry has been lobbying aggressively to temper those regulations, the rogue trading case could give proponents of the so-called Volcker Rule, which would prohibit proprietary trading, more ammunition. UBS, which stands to lose $2.3 billion on the unauthorized trades, said in its initial four-sentence announcement on the incident that “no client positions were affected.” The implication was that the trader was using company money to place his bets.

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