Dodd-Frank and Regulating Systemic Risk: A Brisk Appraisal of Where We Are Now

Duke University law professor Steven L. Schwarcz is a leading and prolific commentator on the financial crisis, its origins and aftermath, and the ways forward in financial regulation.    A week or so ago, Steve delivered the keynote address at a George Mason conference on financial services regulatory reform, “Identifying and Managing Systemic Risk:  An Assessment of Our Progress,” now up at SSRN.   (Co-Conspirator Todd was also a speaker at the conference, but I don’t believe there is a video or podcast of the proceedings, otherwise I’d add the link.) 

 If you are looking for a short, brisk, analytic take on systemic risk and where regulatory efforts to address it stand today, this is a great paper.  I think its assessment of Dodd-Frank and systemic risk is correct, and especially like the way in which it frames the on-going problem as a form of the ‘tragedy of the commons’.   Agree or disagree with this or that particular, however,  it offers a robust analytic structure for thinking about systemic risk and regulation into the future, along with some pithy examples by way of illustration, and a useful summing up of where things stand today.  (Full disclosure:  Steve and I are co-authors on a forthcoming  book on financial regulatory reform, so it can be safely assumed that I share many of Steve’s views on financial regulatory reform, although I have been dilatory at best in getting this book project out the door.)

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