Last Thursday a sweeping reform of the US financial system passed through congress and it now awaits sign off by President Obama. The Dodd-Franks Wall Street bill is a direct result of the global financial crisis and although it may be sometime before the full extent of the reforms are know, it appears it’s impact will be far reaching.
Dodd-Franks Bill Changes:
Key changes in the 2307 page bill include:
- Federal oversight of derivatives and mortgages;
- The authority for regulators to impose restrictions on ‘too big to fail’ companies;
- The requirement for companies to give shareholders a non-binding vote on executive remunerations;
- Restrictions on bank proprietary trading;
- The mechanism for investors to sue credit ratings agencies;
- A requirement for issuers of complex products to retain a portion of the associated risk; and
- A new council of regulators to monitor systemic risk.
The changes contained in the bill will hopefully set the tone for, the long over due, improved regulation of the US financial system.
And whilst the changes are aimed squarely at instilling confidence in US consumers of financial products, the changes will influence global standards for a number of financial institutions operating beyond the shores of the Unite States.
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