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On the formation of Dodd-Frank Act derivatives regulations

Published version
Peer-reviewed

Type

Article

Change log

Authors

Mankad, S 
Michailidis, G 
Kirilenko, A 

Abstract

Following the 2007-2009 financial crisis, governments around the world passed laws that marked the beginning of new period of enhanced regulation of the financial industry. These laws called for a myriad of new regulations, which in the U.S. are created through the so-called notice-and-comment process. Through examining the text documents generated through this process, we study the formation of regulations to gain insight into how new regulatory regimes are implemented following major laws like the landmark Dodd-Frank Wall Street Reform and Consumer Protection Act. Due to the variety of constituent preferences and political pressures, we find evidence that the government implements rules strategically to extend the regulatory boundary by first pursuing procedural rules that establish how economic activities will be regulated, followed by specifying who is subject to the procedural requirements. Our findings together with the unique nature of the Dodd-Frank Act translate to a number of stylized facts that should guide development of formal models of the rule-making process.

Description

Keywords

Efficiency, Organizational, Humans, Models, Organizational, Policy, United States

Journal Title

PLoS One

Conference Name

Journal ISSN

1932-6203
1932-6203

Volume Title

14

Publisher

Public Library of Science (PLoS)
Sponsorship
National Science Foundation Grant No. 1633158