The GAO Report focused on government expenditure and regulatory fragmentation. Implicit in the Report is that such fragmentation has an enormous cost for the private sector. Examiners from different agencies investigated the same institution for what is essentially the same activity. The result was minimal differences between regulators’ assessments of near-identical products for roughly twice the cost.

A market with significantly diminished liquidity is likelier to experience a downward price plunge than one with sufficient liquidity. Whether this is because a large sale cannot be absorbed by the market or a series of small transactions sets off an escalating panic is a different question. It is possible that the causes of diminished liquidity (e.g., higher capital charges and the Volcker Rule) are sufficiently beneficial to be worth the loss. Even so, there becomes a point when the…

The dissent has a more compelling argument as to the duty that the employee owed to his employer. An employee negotiating his own salary clearly has no duty to state how much he is willing to take – just as the employer has no duty to tell the employee how much the employer is willing to pay. On the other hand, if an employee goes out to negotiate a deal as an agent, he has the broadest obligation to disclose all to his principal. If the employee lies about the course and terms of the…

Buy-side and sell-side share some common interests; e.g., all market participants seem to take electronic trading as a given. Both sides seem to accept the likelihood of more regulation in the trading of Treasuries, with the buy-side preferring that the new regulation fall largely on the sell-side, and the sell-side urging that the pain be spread. There was significant discussion in the comments on clearing functions, particularly with respect to repo trades. The sell-side asserted that…