Get Yo Links: Bankers don't like Dodd Frank, Rick Perry Thinks Pre-Crisis Regulation was Satisfactory

The November cover story of American Banker has some very unflattering things to say about the Dodd-Frank legislation. The nearly 4,000 words piece takes aim at the legislation, arguing that the law places undue burdens on smaller community banks, and that the long drawn out rule making process, that isn't even halfway complete nearly two years after the law's passage, is creating uncertainty that is hostile to the banking business. One of the more interesting complaints from bankers interviewed is that regulators are taking too much of a quantitative approach to determining the soundness of loans, as opposed to evaluating each loan on a case by case basis. With all the extra regulators on board at the FDIC, you would think this would be easier to do. American Banker doesn't press the regulators on this. Frankly it doesn't give many opportunities for regulators or law makers to respond to bankers concerns, either.

While Rick Perry was on CNBC unveiling his new flat tax, he took the time to say he believes financial regulation, pre-crisis, was adequate. This new line of thinking from Republicans is something I expect we'll see more of as the events of the financial meltdown fade in people's memory (even if the effects of said meltdown don't).

Time magazine has a new piece up about the much ballyhooed Volcker Rule, which in its simplest form forbids deposit taking institutions from speculative trading on their own accounts. Paul Volcker, the former Federal Reserve chairman for whom the rule is named, has turned against the iteration of the rule passed in the recent Dodd-Frank legislation. He argues it contains too many loopholes. This piece gives a nice explanation of how all those loopholes got in there.

Federal Reserve Officials have been increasingly vocal about their willingness and ability to further stimulate the economy. Many Wall Street Watchers are seeing this as a sure-fire sign that more quantitative easing is on the way. Quantitative easing is a process by which the Federal Reserve buys United States treasury bonds, bidding up the price of those bonds, and therefore bidding down the interest rate at which the U.S. government borrows. Since most interest rates are based off of what the U.S. government pays, this will theoretically lower borrowing costs for individuals and businesses, giving them extra cash to spend. Giving consumers and businesses more cash will help stimulate the economy. Others fear that this will put too much extra money into the system and lead to escalating asset prices, otherwise known as inflation.