Mind the gap: Moving towards federal insurance regulation

Michael Johnston submits:Financial stocks will be in focus in coming days, as investors digest financial reforms agreed upon by lawmakers in a bill known as the Dodd/Frank Act. These reforms were passed early Friday in what many are calling the most sweeping regulatory overhaul on the American financial system since the 1933 and 1934 Security Exchange Acts were instituted in the wake of the Great Depression.

Editor’s Note: The following post comes to us from James R. Wigand, Director, Office of Complex Financial Institutions at the Federal Deposit Insurance Corporation, and is based on Director Wigand's testimony before the U.S.

Ila Patnaik, Ajay Shah, 20 November 2012Can we agree that capital controls are an effective tool for macroeconomic policy? If so, should they be permanent or temporary? This column argues that under a permanent system of capital controls, a country will always bear costs whether there is a surge or capital flight or not.

By Simon Johnson

ByTom Dorsey:The Dodd-Frank Act was designed to set high standards and create an environment that would prevent a repeat of the 2007-08 financial disaster. The Basel III requirements were designed to force big banks to hold enough capital to sustain a recession or market downturn that would put banks in jeopardy of the 'too-big-to-fail' scenario.

Editor’s Note: The following post comes to us from Margaret E. Tahyar and Gabriel D. Rosenberg of the Financial Institutions Group at Davis Polk & Wardwell LLP.

ByDerek Chipman:In the most recent presidential debate Mitt Romney further expressed his opinion in regards to the Dodd Frank Act. He claimed that if elected, he intends to revoke the act. Although I do not believe the act will be revoked, it is highly probable that he will make amendments to it if elected. This article outlines the current legislation of the Dodd Frank Act and focuses on what effects the Volcker Rule has on some of the nation's largest financial institutions.