Banks, investment managers, brokers and other financial firms doing business in the US are riding the biggest wave of regulation since the 1930s – and possibly of all time – as regulators implement the requirements of the Dodd-Frank Act. To complicate matters, this tsunami of financial regulation is happening amid an economic ebb tide in the US and the rest of the world.
The chaos and confusion caused by a dozen regulators struggling to write about 250 rules in a two- to five-year rule-making process is not just impacting US banks, it is also affecting foreign banks’ operations in the US, and in some cases their activities outside the US. Domestic banks are likely to find revenues and returns on capital so depleted by the measures that some will have to exit entire lines of business. Similarly, foreign banks will have to consider whether it is worth remaining in the US.
