* Background to the Dodd-Frank Act
* The 2008 Financial Crisis and Derivatives
* The road to the Dodd-Frank Act
* The Architecture of Dodd-Frank Title VII
* Where are we now?
* Where are we headed?
Video: a non regulation approach doesn’t work.
Because capital markets innovate and change so quickly there is a difficult control: doesn’t it make also regulation to work bad? Is regulation also a step behind the evolution of the market (hence ineffiency)?
Capital moves and flows quickly: what are the possibility of a regulatory arbitrage? All the positive externalities related with regulation how can interact with its negative externalities?
Reference to the P&G case. The transaction was of illegal future contract or illegal securities or illegal options? uncertainty. How do you classify these transactions? Not those we said but something else. There must be the confidence that transactions are enforceable. Bond transaction is allowed when a lawyer says that it is enforceable. If you can’t classify the transaction you can’t give that opinionholes. Dodd-Frank act wants to reduce this uncertainty.
Regulators have been keeping up with innovation. Regulators work side by side with banks, so they know what is going on. There have been regulators in CFTC really connected with politics. In Usa we are expert of regulators arbitrage: it is important to have a goal outstanding and to get to a harmonized regulation also between USA and Europe.
How the CFMA Confirmed Deregulation. To move from uncertainty they created this: Eligible participants (institutions)individually negotiatedunregulated. Do the trade between the right counterparty.
Perrone: If you put the issue in terms of certainty there is a simple way to get to it with law: there may be a rule saying “do what you want” or a rule saying what you can do and what you can’t. To get to certainty go towards no regulation as a matter of certainty. In Europe this...