Regulatory Reform Summit 2011
July 13, 2011
- Highlights - Regulatory Reform Summit: Dodd-Frank Impact Analysis
Outlook for the Financial Sector
The Regulatory Reform Summit was wrapped up by a panelist discussion of the outlook for the financial sector, which broadly addressed the long-term impact that Dodd-Frank and global financial regulatory reform might have on the industry as well as global markets.
Guy Moszkowski, Managing Director of U.S. Equity Research, Bank of America, focused his remarks on the impact of Dodd-Frank and Basel III on capital markets. Moszkowski expressed concern that the proposed derivatives rules and the Volcker Rule could potentially put U.S. banks at a competitive disadvantage. He added that the prevailing uncertainty over the effect these rules may have has hampered the recovery of the capital markets and explains the financial industry’s depressed share prices. Further study of the ultimate impact of the new regulations must be done.
Jason Goldberg, Managing Director, Barclay’s Capital, concentrated on Dodd-Frank’s effect on consumer finance, which he said is already visible today. He said increased underwriting standards, heightened capital levels, and conservative risk appetite are a result of banks adapting to the “spirit” of Dodd-Frank. Golberg added that, as rules are finalized and banks reassess their business models, products and pricing will change largely to the detriment of consumers. He said several fee and credit products will either be eliminated or reworked and credit availability could decrease.