Algorithmics’ risk and capital management experts have launched a comprehensive review of the Wall Street Reform and Consumer Protection Act (Dodd-Frank) to help affected firms and their employees formulate action plans to meet the new regulations. Despite much coverage of the Act since being signed into law in July 2010, there remains a need for more clarity as to what each bank or individual banker needs to do in response.
Gabriella Symeonidou, Algorithmics’ researcher and co-author of the report, ‘Dodd-Frank Wall Street Reform and Consumer Protection Act: Business Model Implications’, said: “The Act is definitely a step closer to a stronger and better regulated economy. However, the lengthy transition periods and numerous exemptions will hinder smooth implementation of the new requirements, and risk causing ambiguity within financial institutions and regulatory agencies.”
Co-author of the report, Mario Onorato, head of balance sheet risk and capital management at Algorithmics and honorary senior lecturer at Cass Business School, London, said: “To help practitioners better identify and adopt appropriate approaches for their banks for compliance, long term stability and continued growth, Algorithmics has reviewed the full contents of the Act and assessed the practical implications from the practitioners’ perspective.”
Institutions are already, reportedly, finding the inconsistencies that will limit the impact on earnings that the Act is expected to bring about. However, Algorithmics believes that institutions will need to understand the fundamentals of the changes that are coming in order for the risk, financial and business management teams to put in place the structure, systems and process to adapt advantageously.
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