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My vague understanding was that Dodd-Frank was a partial restoration of the pre-Clinton era limits on speculation... Is that not correct? In any case I don't un
by nielsbot 8y ago
My vague understanding was that Dodd-Frank was a partial restoration of the pre-Clinton era limits on speculation... Is that not correct? In any case I don't understand how that helps preserve incumbents over small banks.
- ars 8y agoIt does a LOT of stuff. Some good, some just paperwork. It's the paperwork part I'm talking about. But it's such a large act that without knowing which parts were repealed it's very hard to discuss.
- mtgx 8y agoYes, this. Perhaps some of the Dodd-Frank reversal will indeed be good for smaller banks, but my guess without reading the bill is that they also removed a lot of the stuff that only affected the big banks or simply regulated the worst behavior that banks can have, like say over-charging customers on fees and stuff like that.
- lallysingh 8y agoJust a note: paperwork is usually just data on disk now. Maybe a database or 10, or just a bunch of logs. But generally not as bureaucratically onerous as one envisions a ton of actual paperwork. A virtual paper trail isn't a bad thing when you've got to (a) manage risks based on decisions made by these processes and (b) make sure you're obeying the law.
- pzone 8y agoNo, Dodd-Frank is in fact bureaucratically onerous. The cost of paperwork has nothing to do with whether or not the documents are actually on paper.
- klipt 8y agoData science is hard and requires lots of data. It's still useful to have that data.
- simonh 8y agoDodd-Frank is hugely costly. The Government Accountability Office estimates the total cost of the banks to reach compliance at almost $3bn over 5 years.
- Jweb_Guru 8y agoRemind me again what net profit the banking sector had during the same five year period? I know last year alone it was over $48 billion.
- simonh 8y agoAm I surprised that the banks protected from competition by the moat created by Dodd-Frank regulations are highly profitable?
- nielsbot 8y agoare the costs more onerous for smaller banks or are they proportional to bank size?
- haneefmubarak 8y agoI imagine the costs can be somewhat seen along the lines of good old `y = ax + b`, where the coefficient `a` (variable cost) is more or less doable but the term `b` (fixed cost) is high enough that it turns into a non-starter for smaller banks.
- simonh 8y agoI seem to remember talk to the effect that the minimum cost for a small bank was something like $20m plus.
- Jweb_Guru 8y agoMy point was that "$3 billion over five years is very costly" is a largely meaningless statement when applied to the entire backing sector.
- CaptainZapp 8y agoI'm working on regulatory reporting for a major bank and can assure that organizing this data from a database or 10 is a huge headache. This is not specific to my bank it goes for every player in the industry. I'm not critisizing this, just pointing out that the process is hugely more complex than just querying a few tables. Especially given that there's no margin for errors since they get hugely expensive.
- lallysingh 8y agoYeah sorry, I wasn't trying to say that it wasn't still a pain in the ass.
- ars 8y ago> A virtual paper trail Having been involved in such a thing, I can tell you that the people writing the paper trail, and the ones actually creating/using the information on the paper trail have little to do with one another. Those who create the trail are just trying to meet the rules, and care little about what actually is done. Those using the information care little about the rules, and just want some information. If you are lucky they might email and ask a question or two. It's 100% useless. It just makes it look like there is information, there's nothing real there. eg: Rule: You must secure your server. Paper writer: we secure our server. Sysadmin: No one talked to me about this, and even if they did I don't understand what you want from me, go away. You get what I mean? It's worthless work.