By implication and steadfast pursuit of this action, the NY Attorney General is making the case that any investor in a fossil fuel company is contributing to the "damage these companies are doing to our planet." It would be interesting to know what the Attorney General believes that his office should or could do with respect to those investors (or for that matter, suppliers and users) who are said to be contributing to such damage.

Regarding the coal company's statement…

There was never any academic support for Section 716's inclusion within Dodd-Frank, and the section was opposed generally by the banking regulators prior to its adoption. According to contemporaneous press reports - see, e.g.,  - Section 716 was added to Dodd-Frank in order to win the support of then-Senator Blanche Lincoln, whose vote was needed to pass Dodd-Frank.

Regarding Senator Warren's implicit suggestion that swaps should be cleared, we refer to the…

While the tone of this speech suggests that the regulators should be praised for their accomplishments in making the financial system better, one may also make a fair argument that the speech describes a series of regulatory mis-judgements and regulatory over-confidence, with the result being a financial system that is in many respects more fragile than it was before the crisis.

Let's start with central clearing. In the words of Vice-Chair Hoenig: "Increased use of clearing has…

The big message of the report is "deference"; i.e., at the end of the day, any national regulator that wants to enable its financial institutions to do business in another major financial center is going to be required to recognize the major clearing corporations of that jurisdiction.