Dodd-Frank significantly increased the authority of, and the responsibilities imposed on, the banking regulators, particularly the Federal Reserve Board. Given these greater responsibilities, it is not surprising that bank regulators wish to be cautious. On the other hand, it is their duty to become more familiar with the products and markets that their authority now impacts. To the extent that the regulators exercise undue caution because of a lack of familiarity with a market or product,…

I understand is a big hit in Finland.

This is a significant letter, not so much for its comments on the particular rules, as for what it says about the costs of regulation; i.e., that regulatory change is expensive and that regulatory complexity is expensive, even ignoring the substance of any particular rule. Put differently, in many cases, regulated firms prefer rule stability to rule improvement or liberalization.

That observation is also consistent with a very slow rate of economic growth during the post-Dodd…

This Risk Alert illustrates how much the nature of broker-dealer and investment adviser activities has changed over the last five to ten years. While there is no diminution of the importance of traditional securities compliance concerns (e.g., insider trading or conflicts of interest), of equal concern are matters related to technology controls and cybersecurity. For example, among the deficiencies noted in the alert are (i) storage of information on laptop computers; (ii)…