It has been more than a year since the passage of the Dodd-Frank legislation banks, both large and small, are counting down the time it will take for all 11 banking regulatory agencies to finish restructuring (or in some cases to start up) their organizations. Writing all of the rules that the legislation calls for is a process that could take years, given slower-than-expected progress. According to a report from the law firm Davis Polk, regulators have already missed the deadlines on 163 rules that the act required them to undertake by a certain date, including 122 in the third quarter of 2011 alone.
On the one hand, Deputy Treasury Secretary Neal Wolin stated that “Wall Street reform helps level the playing field between large banks and small ones, helping to eliminate distortions that previously favored the biggest banks that held the most risk.”
And on the other hand, the American Bankers Association president and CEO Frank Keating asks “When you have 37 employees and 4,000 pages to read and you also have to run a bank — how are you going to do that?”
The day-to-day changes in compliance procedures, exams and even the risk-management methodology forged by major bank regulators already have had a profound impact. There have been reports in the press that even the regulators are unclear on the rules.
It would seem that the ancient oriental curse “May You Live in Interesting Times” has been visited upon Banks. Even the Wall Street Journal is talking about Why It’s No Fun to Be a Banker.
Only time will tell whether which view is more correct. In the meantime, the L-Cam Crew wishes everyone a Safe and Happy Halloween!