Dodd-Frank’s Derivatives Reforms: Clear as Mud
When the architects of the Dodd-Frank regulatory overhaul flinched from
the most effective solution — breaking up the banks so that none would
be too big to drag down the financial system — they forced regulators of
the derivatives market into a cumbersome and potentially dangerous
workaround.
Those regulators are feverishly making lots of important, arcane rulings
that are being followed only by insiders. They are replacing an opaque
system prone to failures with a new, huge Rube Goldberg-like system that
may reduce global financial risk. Or it may not. Nobody knows, not
least the regulators themselves.
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