Books
Regulating Wall Street: CHOICE Act vs. Dodd-Frank
— March 8, 2017
By NYU Stern and NYU Law Faculty
The NYU Stern School of Business presents a new book, Regulating Wall Street: CHOICE Act vs. Dodd-Frank, authored by more than a dozen faculty members from NYU Stern and the NYU School of Law. With the change in power in Washington D.C., both Congress and the Administration seek to repeal parts of the Dodd-Frank Act of 2010, streamline regulation and reduce compliance costs. In their analysis, the authors address the prominent issues of financial regulation and examine the benefits and drawbacks of the CHOICE Act—the prominent proposal to reform financial regulation—while comparing it to Dodd-Frank.
The book is a compilation of essays that analyze both Acts and call for significant changes. While the authors view Dodd-Frank as too burdensome, the CHOICE Act fails to address systemic risk properly. For example, the CHOICE Act’s proposed elimination of the designation of Systemically Important Financial Institutions (SIFIs) and Financial Market Utilities (FMUs), together with the Act’s prohibition of temporary government lending to resolve failing SIFIs, will exacerbate the too-big-to-fail problem. Furthermore, the CHOICE Act, like Dodd-Frank, fails to offer any solutions for Fannie Mae and Freddie Mac, for the counterproductive complexity of the U.S. regulatory structure, and for nonbanks’ de facto (“shadow”) banking activities.
Regulating Wall Street: CHOICE Act vs. Dodd-Frank adds to Stern’s roster of published works on the Financial Crisis of 2007-2009 and financial regulation including: Restoring Financial Stability: How to Repair a Failed System; Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance; Dodd-Frank: One Year On; Guaranteed to Fail; and Modernizing Insurance Regulation. The book’s four editors are Professors Matthew P. Richardson, Kermit L. Schoenholtz, Bruce Tuckman, and Lawrence J. White. The authors are Professors Barry E. Adler, Thomas F. Cooley, Yiwei Dou, Ralph S. J. Koijen, Thomas Philippon, Matthew P. Richardson, Stephen G. Ryan, Kermit L. Schoenholtz, Philipp Schnabl, Marti G. Subrahmanyam, Bruce Tuckman, Stijn van Nieuwerburgh, Laura L. Veldkamp, Paul A. Wachtel, Ingo Walter, and Lawrence J. White.
The book is a compilation of essays that analyze both Acts and call for significant changes. While the authors view Dodd-Frank as too burdensome, the CHOICE Act fails to address systemic risk properly. For example, the CHOICE Act’s proposed elimination of the designation of Systemically Important Financial Institutions (SIFIs) and Financial Market Utilities (FMUs), together with the Act’s prohibition of temporary government lending to resolve failing SIFIs, will exacerbate the too-big-to-fail problem. Furthermore, the CHOICE Act, like Dodd-Frank, fails to offer any solutions for Fannie Mae and Freddie Mac, for the counterproductive complexity of the U.S. regulatory structure, and for nonbanks’ de facto (“shadow”) banking activities.
Regulating Wall Street: CHOICE Act vs. Dodd-Frank adds to Stern’s roster of published works on the Financial Crisis of 2007-2009 and financial regulation including: Restoring Financial Stability: How to Repair a Failed System; Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance; Dodd-Frank: One Year On; Guaranteed to Fail; and Modernizing Insurance Regulation. The book’s four editors are Professors Matthew P. Richardson, Kermit L. Schoenholtz, Bruce Tuckman, and Lawrence J. White. The authors are Professors Barry E. Adler, Thomas F. Cooley, Yiwei Dou, Ralph S. J. Koijen, Thomas Philippon, Matthew P. Richardson, Stephen G. Ryan, Kermit L. Schoenholtz, Philipp Schnabl, Marti G. Subrahmanyam, Bruce Tuckman, Stijn van Nieuwerburgh, Laura L. Veldkamp, Paul A. Wachtel, Ingo Walter, and Lawrence J. White.