On the basis of the European Commission’s 2015 Action Plan “on Building a Capital Markets Union” (CMU), as further specified in the 2017 “Mid-Term Review of the [CMU] Action Plan”, the European Parliament and the Council adopted on 27 November 2019 Regulation (EU) 2019/2088 “on sustainability-related disclosures on the financial services sector” (SFDR) and Regulation (EU) 2019/2089 “as regards EU Climate Transition Benchmarks, EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks”. The third – and probably most important – part of the related ‘trilogy’, which is also based on the Commission’s 2018 “Action Plan on Financing Sustainable Growth”, is Regulation (EU) 2020/852 “on the establishment of a framework to facilitate sustainable investment” (the so-called Taxonomy Regulation, TR). The objective of this legislative act (which, inter alia, also introduces specific amendments to the SFDR) is to establish uniform criteria for determining whether an economic activity qualifies as environmentally sustainable for the purpose of establishing the degree to which an investment is environmentally sustainable as well. It does not itself establish a label for sustainable financial products; the details of what constitutes an environmentally sustainable activity or product is being built-up through delegated acts to be adopted by the Commission, of which the first two will apply from 31 December 2021 and the other four from 31 December 2022. The main purpose of this Chapter, which contains a thorough analysis of the entire legislative act, is threefold:
First, briefly albeit systematically present the “system of rules” relating to the “core element” of the TR, namely the criteria according to which an economic activity will be considered environmentally sustainable and the six environmental objectives (the six types of economic activities which qualify as environmentally sustainable activities for the purposes of the taxonomy).
Second, analyse the TR’s field of application, covering measures adopted by Member States and by the EU that set out requirements for financial market participants or issuers in respect of financial products or corporate bonds that are made available as environmentally sustainable, financial market participants that make available (environmentally sustainable) financial products (applying to credit institutions only to the extent that they provide portfolio management services) and undertakings falling under the scope of the “Non-Financial Reporting Directive”, as well as analyse the disclosure requirements for environmentally sustainable investments, as set out in the TR.
Third, conclude with some considerations on how the core element of the TR will be of primary importance even for entities which are not covered by its scope of application, namely beyond the reach of the CMU project. These considerations will be based on the observation that the taxonomy system, as developed within
{"title":"The Taxonomy Regulation: More Important Than Just as an Element of the Capital Markets Union","authors":"C. Gortsos","doi":"10.2139/ssrn.3750039","DOIUrl":"https://doi.org/10.2139/ssrn.3750039","url":null,"abstract":"On the basis of the European Commission’s 2015 Action Plan “on Building a Capital Markets Union” (CMU), as further specified in the 2017 “Mid-Term Review of the [CMU] Action Plan”, the European Parliament and the Council adopted on 27 November 2019 Regulation (EU) 2019/2088 “on sustainability-related disclosures on the financial services sector” (SFDR) and Regulation (EU) 2019/2089 “as regards EU Climate Transition Benchmarks, EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks”. The third – and probably most important – part of the related ‘trilogy’, which is also based on the Commission’s 2018 “Action Plan on Financing Sustainable Growth”, is Regulation (EU) 2020/852 “on the establishment of a framework to facilitate sustainable investment” (the so-called Taxonomy Regulation, TR). The objective of this legislative act (which, inter alia, also introduces specific amendments to the SFDR) is to establish uniform criteria for determining whether an economic activity qualifies as environmentally sustainable for the purpose of establishing the degree to which an investment is environmentally sustainable as well. It does not itself establish a label for sustainable financial products; the details of what constitutes an environmentally sustainable activity or product is being built-up through delegated acts to be adopted by the Commission, of which the first two will apply from 31 December 2021 and the other four from 31 December 2022. The main purpose of this Chapter, which contains a thorough analysis of the entire legislative act, is threefold:<br><br>First, briefly albeit systematically present the “system of rules” relating to the “core element” of the TR, namely the criteria according to which an economic activity will be considered environmentally sustainable and the six environmental objectives (the six types of economic activities which qualify as environmentally sustainable activities for the purposes of the taxonomy).<br><br>Second, analyse the TR’s field of application, covering measures adopted by Member States and by the EU that set out requirements for financial market participants or issuers in respect of financial products or corporate bonds that are made available as environmentally sustainable, financial market participants that make available (environmentally sustainable) financial products (applying to credit institutions only to the extent that they provide portfolio management services) and undertakings falling under the scope of the “Non-Financial Reporting Directive”, as well as analyse the disclosure requirements for environmentally sustainable investments, as set out in the TR.<br><br>Third, conclude with some considerations on how the core element of the TR will be of primary importance even for entities which are not covered by its scope of application, namely beyond the reach of the CMU project. These considerations will be based on the observation that the taxonomy system, as developed within","PeriodicalId":376194,"journal":{"name":"ERN: Regulation & Supervision (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125473457","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine the readability, length, numerical content, uncertainty, and uniqueness of Moody’s rating reports and analyze how regulatory events have influenced these measures between 1998-2016. We find that information in rating reports significantly dropped after the Credit Rating Reform Act in 2006, but readability and the length of rating reports significantly improved after the Dodd-Frank regulation in 2010. We also find that greater readability leads to lower announcement returns after downgrades. Reports that are more similar to previous reports are associated with less negative announcement returns, providing evidence that the content of rating reports plays a significant role for investors.
{"title":"What’s in a Rating Report? Parsing the Content of Moody’s Credit Rating Reports from 1998-2016","authors":"Florian Kiesel, Darren J. Kisgen","doi":"10.2139/ssrn.3723861","DOIUrl":"https://doi.org/10.2139/ssrn.3723861","url":null,"abstract":"We examine the readability, length, numerical content, uncertainty, and uniqueness of Moody’s rating reports and analyze how regulatory events have influenced these measures between 1998-2016. We find that information in rating reports significantly dropped after the Credit Rating Reform Act in 2006, but readability and the length of rating reports significantly improved after the Dodd-Frank regulation in 2010. We also find that greater readability leads to lower announcement returns after downgrades. Reports that are more similar to previous reports are associated with less negative announcement returns, providing evidence that the content of rating reports plays a significant role for investors.","PeriodicalId":376194,"journal":{"name":"ERN: Regulation & Supervision (Topic)","volume":"66 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121664296","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The financial sector is entering a new era of rapidly advancing data analytics as deep learning models are adopted into its technology stack. A subset of Artificial Intelligence, deep learning represents a fundamental discontinuity from prior analytical techniques, providing previously unseen predictive powers enabling significant opportunities for efficiency, financial inclusion, and risk mitigation. Broad adoption of deep learning, though, may over time increase uniformity, interconnectedness, and regulatory gaps. This paper maps deep learning’s key characteristics across five possible transmission pathways exploring how, as it moves to a mature stage of broad adoption, it may lead to financial system fragility and economy-wide risks. Existing financial sector regulatory regimes - built in an earlier era of data analytics technology - are likely to fall short in addressing the systemic risks posed by broad adoption of deep learning in finance. The authors close by considering policy tools that might mitigate these systemic risks.
{"title":"Deep Learning and Financial Stability","authors":"G. Gensler, Lily Bailey","doi":"10.2139/ssrn.3723132","DOIUrl":"https://doi.org/10.2139/ssrn.3723132","url":null,"abstract":"The financial sector is entering a new era of rapidly advancing data analytics as deep learning models are adopted into its technology stack. A subset of Artificial Intelligence, deep learning represents a fundamental discontinuity from prior analytical techniques, providing previously unseen predictive powers enabling significant opportunities for efficiency, financial inclusion, and risk mitigation. Broad adoption of deep learning, though, may over time increase uniformity, interconnectedness, and regulatory gaps. This paper maps deep learning’s key characteristics across five possible transmission pathways exploring how, as it moves to a mature stage of broad adoption, it may lead to financial system fragility and economy-wide risks. Existing financial sector regulatory regimes - built in an earlier era of data analytics technology - are likely to fall short in addressing the systemic risks posed by broad adoption of deep learning in finance. The authors close by considering policy tools that might mitigate these systemic risks.","PeriodicalId":376194,"journal":{"name":"ERN: Regulation & Supervision (Topic)","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131536639","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We investigate the risk-taking of stressed banks, that is the large financial institutions that have faced unprecedented regulatory supervision and capitalization requirements. We take steps toward identifying how supervision affects risk-taking in the banking system. In the Dodd-Frank Act, supervision distinctly improves borrowers' ratings by 0.7 rating classes. Banks respond to supervision heterogeneously, depending on the capital charges associated with their investments. Ignoring the confounding effect of capital requirements leads to the erroneous conclusion that supervision under the Dodd-Frank Act is ineffective. Our results indicate that stressed banks improve financial stability because they are better capitalized and engage in safer lending.
{"title":"Stressed Banks","authors":"Diane Pierret, R. Steri","doi":"10.2139/ssrn.3066403","DOIUrl":"https://doi.org/10.2139/ssrn.3066403","url":null,"abstract":"We investigate the risk-taking of stressed banks, that is the large financial institutions that have faced unprecedented regulatory supervision and capitalization requirements. We take steps toward identifying how supervision affects risk-taking in the banking system. In the Dodd-Frank Act, supervision distinctly improves borrowers' ratings by 0.7 rating classes. Banks respond to supervision heterogeneously, depending on the capital charges associated with their investments. Ignoring the confounding effect of capital requirements leads to the erroneous conclusion that supervision under the Dodd-Frank Act is ineffective. Our results indicate that stressed banks improve financial stability because they are better capitalized and engage in safer lending.","PeriodicalId":376194,"journal":{"name":"ERN: Regulation & Supervision (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126276513","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We find significant evidence of model mis-specification, in the form of neglected serial correlation, in the econometric model of the U.S. housing market used by Taylor (2007) in his critique of monetary policy following the 2001 recession. When we model that serial correlation, his model fails to replicate the historical paths of housing starts and house price inflation. Further modifications in the model allow us to capture both the housing boom and the bust. Our analysis suggests that a counterfactual monetary policy proposed by Taylor (2007) would not have averted the pre-financial crisis collapse in the housing market.
{"title":"Off Track Monetary Policy and Housing","authors":"Jaroslav Horvath, Fredj Jawadi, P. Rothman","doi":"10.2139/ssrn.3695354","DOIUrl":"https://doi.org/10.2139/ssrn.3695354","url":null,"abstract":"We find significant evidence of model mis-specification, in the form of neglected serial correlation, in the econometric model of the U.S. housing market used by Taylor (2007) in his critique of monetary policy following the 2001 recession. When we model that serial correlation, his model fails to replicate the historical paths of housing starts and house price inflation. Further modifications in the model allow us to capture both the housing boom and the bust. Our analysis suggests that a counterfactual monetary policy proposed by Taylor (2007) would not have averted the pre-financial crisis collapse in the housing market.","PeriodicalId":376194,"journal":{"name":"ERN: Regulation & Supervision (Topic)","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130070716","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the impact of business diversification of banks on their risk, with efficiency taken into consideration as a conduit. Using bank-level data from more than 1400 commercial banks in 39 emerging economies during 2000-2016, we find that increased business diversification exerts two competing effects on bank risk, and overall reduces bank risk. The direct effect of increased diversification bolsters the stability of banks, but this is offset partially by the indirect effect of lowered efficiency, which increases the riskiness of banks. This provides a consolidating evidence on the competing arguments on the diversification-efficiency nexus in banking — the “diversification-premium” argument vs. the “diversification-discount” argument — with its extended implications on bank risk. In addition, we also present evidence that the diversification-bank risk nexus is heterogeneous on the bank size, market power and the ownership of banks, which provides useful policy implications for diversification strategies by bank managers as well as for the effective surveillance by bank regulators.
{"title":"Diversification, Efficiency and Risk of Banks: New Consolidating Evidence From Emerging Economies","authors":"B. Jeon, Ji (George) Wu, Limei Chen, Minghua Chen","doi":"10.2139/ssrn.3711150","DOIUrl":"https://doi.org/10.2139/ssrn.3711150","url":null,"abstract":"This paper examines the impact of business diversification of banks on their risk, with efficiency taken into consideration as a conduit. Using bank-level data from more than 1400 commercial banks in 39 emerging economies during 2000-2016, we find that increased business diversification exerts two competing effects on bank risk, and overall reduces bank risk. The direct effect of increased diversification bolsters the stability of banks, but this is offset partially by the indirect effect of lowered efficiency, which increases the riskiness of banks. This provides a consolidating evidence on the competing arguments on the diversification-efficiency nexus in banking — the “diversification-premium” argument vs. the “diversification-discount” argument — with its extended implications on bank risk. In addition, we also present evidence that the diversification-bank risk nexus is heterogeneous on the bank size, market power and the ownership of banks, which provides useful policy implications for diversification strategies by bank managers as well as for the effective surveillance by bank regulators.","PeriodicalId":376194,"journal":{"name":"ERN: Regulation & Supervision (Topic)","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126443872","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This is a response to the Office of the Comptroller of the Currency's Advance Notice of Proposed Rulemaking for information to help in evaluating the regulatory environment for the digital activities of national banks and federal savings associations. In this comment, we raise concerns relative to consumer protection broadly and specifically as to fair lending and consumer education problems associated with the use of alternative data and machine learning in credit underwriting.
这是对美国货币监理署(Office of the controller of the Currency)关于拟议规则制定的预先通知的回应，该通知旨在提供信息，以帮助评估国家银行和联邦储蓄协会数字活动的监管环境。在本评论中，我们提出了与消费者保护相关的广泛关注，特别是与在信贷承销中使用替代数据和机器学习相关的公平贷款和消费者教育问题。
{"title":"Comments to Office of the Comptroller of the Currency's Advance Notice of Proposed Rulemaking Regarding National Bank and Federal Savings Association Digital Activities (Docket Id Occ-2019-0028)","authors":"M. Bruckner, Christopher K. Odinet","doi":"10.2139/ssrn.3668495","DOIUrl":"https://doi.org/10.2139/ssrn.3668495","url":null,"abstract":"This is a response to the Office of the Comptroller of the Currency's Advance Notice of Proposed Rulemaking for information to help in evaluating the regulatory environment for the digital activities of national banks and federal savings associations. In this comment, we raise concerns relative to consumer protection broadly and specifically as to fair lending and consumer education problems associated with the use of alternative data and machine learning in credit underwriting.","PeriodicalId":376194,"journal":{"name":"ERN: Regulation & Supervision (Topic)","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133401515","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The regulation of mutual funds in the United States arguably contains the world’s most extensive system of fiduciary protection, buttressed by elaborate liability rules and a host of procedural protections and mandatory disclosure requirements designed to facilitate investor protection and choice. The intensity of this regulatory structure is a subject of perennial debate, as public officials and policy analysts attempt to balance the cost of compliance and oversight against benefits to investors. Over time, government officials have made numerous supervisory accommodations to ameliorate the system’s costs and facilitate industry innovations. But, the burdens of this enhanced system of fiduciary protections for mutual funds remain significant and have encouraged industry participants to evade these legal requirements in a number of ways, such as the creation of alternative vehicles for collective investments (including insurance products and managed accounts of various sorts) and the imbedding of regulated mutual funds into other legal structures that escape the full application of the enhanced systemic of fiduciary protections for mutual funds. Technological innovations, such as robo-advising, are likely to accelerate this trend. In this chapter, I explore this important illustration of regulatory arbitrage and suggest areas where aspects of mutual fund regulation might appropriately be extended to functionally similar investment vehicles.
{"title":"A System of Fiduciary Protections for Mutual Funds","authors":"H. Jackson","doi":"10.2139/ssrn.3659500","DOIUrl":"https://doi.org/10.2139/ssrn.3659500","url":null,"abstract":"The regulation of mutual funds in the United States arguably contains the world’s most extensive system of fiduciary protection, buttressed by elaborate liability rules and a host of procedural protections and mandatory disclosure requirements designed to facilitate investor protection and choice. The intensity of this regulatory structure is a subject of perennial debate, as public officials and policy analysts attempt to balance the cost of compliance and oversight against benefits to investors. Over time, government officials have made numerous supervisory accommodations to ameliorate the system’s costs and facilitate industry innovations. But, the burdens of this enhanced system of fiduciary protections for mutual funds remain significant and have encouraged industry participants to evade these legal requirements in a number of ways, such as the creation of alternative vehicles for collective investments (including insurance products and managed accounts of various sorts) and the imbedding of regulated mutual funds into other legal structures that escape the full application of the enhanced systemic of fiduciary protections for mutual funds. Technological innovations, such as robo-advising, are likely to accelerate this trend. In this chapter, I explore this important illustration of regulatory arbitrage and suggest areas where aspects of mutual fund regulation might appropriately be extended to functionally similar investment vehicles.","PeriodicalId":376194,"journal":{"name":"ERN: Regulation & Supervision (Topic)","volume":"28 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123547208","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the aftermath of the 2007 global financial crisis, regulators have agreed a substantial tightening of prudential regulation for banks operating in the traditional banking sector (TBS). The TBS is stringently regulated under the Basel Accords to moderate financial stability and to minimise risk to government and taxpayers. While prudential regulation is important from a financial stability perspective, the flipside is that the Basel Accords only apply to the TBS, they do not regulate the shadow banking sector (SBS). While it is not disputed that the SBS provides numerous benefits given the net credit growth of the economy since the global financial crisis has come from the SBS rather than traditional banking channels, the SBS also poses many risks. Therefore, the fact that the SBS is not subject to prudential regulation is a cause of serious systemic concern. The introduction of Basel IV, which compliments Basel III, seeks to complete the Basel framework on prudential banking regulation. On the example of this set of standards and its potential negative consequences for the TBS, this paper aims to visualise the incentives for TBS institutions to move some of their activities into the SBS, and thus stress the need for more comprehensive regulation of the SBS. Current coronavirus crisis forced Basel Committee to postpone implementation of the Basel IV rules – this could be perceived as a chance to complete the financial regulatory framework and address the SBS as well.
{"title":"Basel IV Postponed: A Chance to Regulate Shadow Banking?","authors":"Katarzyna Parchimowicz, R. Spence","doi":"10.5553/elr.000163","DOIUrl":"https://doi.org/10.5553/elr.000163","url":null,"abstract":"In the aftermath of the 2007 global financial crisis, regulators have agreed a substantial tightening of prudential regulation for banks operating in the traditional banking sector (TBS). The TBS is stringently regulated under the Basel Accords to moderate financial stability and to minimise risk to government and taxpayers. While prudential regulation is important from a financial stability perspective, the flipside is that the Basel Accords only apply to the TBS, they do not regulate the shadow banking sector (SBS). While it is not disputed that the SBS provides numerous benefits given the net credit growth of the economy since the global financial crisis has come from the SBS rather than traditional banking channels, the SBS also poses many risks. Therefore, the fact that the SBS is not subject to prudential regulation is a cause of serious systemic concern. The introduction of Basel IV, which compliments Basel III, seeks to complete the Basel framework on prudential banking regulation. On the example of this set of standards and its potential negative consequences for the TBS, this paper aims to visualise the incentives for TBS institutions to move some of their activities into the SBS, and thus stress the need for more comprehensive regulation of the SBS. Current coronavirus crisis forced Basel Committee to postpone implementation of the Basel IV rules – this could be perceived as a chance to complete the financial regulatory framework and address the SBS as well.","PeriodicalId":376194,"journal":{"name":"ERN: Regulation & Supervision (Topic)","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133691846","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
P. McLaughlin, Oliver Sherouse, Mark Febrizio, M. King
The passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 continued a trend toward lengthier and more complex acts of Congress. In this article, we use novel metrics of the size, scope, and complexity of acts of Congress to assess Dodd-Frank’s place in this trend. Our analysis is consistent with the hypothesis that, in terms of its regulatory effects, Dodd-Frank is the biggest act of Congress in recent history and may become the biggest ever. We argue that this trend toward longer and more complex laws can cause deterioration in the quality of the regulations the laws authorize for two procedural reasons. First, a large act can create a regulatory surge that overwhelms the quality control process. Second, because a large act can precipitate the creation of many regulations by different agencies that target the same industry, the agencies create rules in relative ignorance of their potential interactions.
2010年通过的《多德-弗兰克华尔街改革与消费者保护法案》(Dodd-Frank Wall Street Reform and Consumer Protection Act)延续了国会通过更长、更复杂法案的趋势。在本文中，我们使用国会法案的规模、范围和复杂性的新指标来评估多德-弗兰克法案在这一趋势中的地位。我们的分析与这样一个假设是一致的，即就其监管效果而言，多德-弗兰克法案是近期历史上最大的国会法案，并可能成为有史以来最大的法案。我们认为，由于两个程序上的原因，这种趋向于更长和更复杂的法律的趋势可能导致法律授权的法规质量的恶化。首先，一个大的行为可能会造成监管激增，使质量控制过程不堪重负。其次，由于一项重大行为可能促使针对同一行业的不同机构制定许多法规，这些机构在制定规则时相对忽视了它们之间潜在的相互作用。
{"title":"Is Dodd-Frank the Biggest Law Ever?","authors":"P. McLaughlin, Oliver Sherouse, Mark Febrizio, M. King","doi":"10.2139/ssrn.3664165","DOIUrl":"https://doi.org/10.2139/ssrn.3664165","url":null,"abstract":"\u0000 The passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 continued a trend toward lengthier and more complex acts of Congress. In this article, we use novel metrics of the size, scope, and complexity of acts of Congress to assess Dodd-Frank’s place in this trend. Our analysis is consistent with the hypothesis that, in terms of its regulatory effects, Dodd-Frank is the biggest act of Congress in recent history and may become the biggest ever. We argue that this trend toward longer and more complex laws can cause deterioration in the quality of the regulations the laws authorize for two procedural reasons. First, a large act can create a regulatory surge that overwhelms the quality control process. Second, because a large act can precipitate the creation of many regulations by different agencies that target the same industry, the agencies create rules in relative ignorance of their potential interactions.","PeriodicalId":376194,"journal":{"name":"ERN: Regulation & Supervision (Topic)","volume":"5 1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123731053","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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