“The center of the financial world has moved from Wall Street to…the Treasury Department.”

Peter Suderman

A major reason the financial reform bill passed was that Democrats and a handful of moderate Republicans felt the need to do something, anything to show that Washington could stand up to Wall Street. But as I’ve argued before, few legislators really understood the industry they set out to change, or what problem they were really trying to solve. The result was a bill that, according to one former FDIC chairman, contains “nothing” that “would have prevented the previous crisis”—the crisis that legislators were ostensibly responding to with the law.

In other words, in authoring the bill, legislators knew they wanted to do something—but never really figured out exactly what they wanted to do. But now it’s the law. And that means it’s up to regulators to figure out what it all really means.

In the near term, long nights will continue as lawyers attempt to answer a barrage of questions by issuing client advisories, hosting Webinars and taking phone calls. But more significant, industry leaders say, will be the shift of power that occurs as regulators flesh out the guts of the legislation during a multi-year rulemaking process.

“The center of the financial world has moved from Wall Street to 15th & Pennsylvania—the Treasury Department. That’s not going to be lost on clients,” said Richard M. Alexander, managing partner at Arnold & Porter…

The article continues at Reason.com

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