The CFTC will have tremendous reach into the swaps business through Dodd-Frank. The EU commission is having problems with the regulation. The FSA says that the rules may not work for year-end. There is clarity to the rules. and this comes from the FSA, The EU, ESMA, BOJ, Bank of France, Swiss regulators, and Japanese regulators. All argue that there iwll be more market uncertainty.
What should be the reach of a domestic regulator in an international market when the rest of the world does not want to follow the same standards? The result is deglobalization and a movement back to regional banking. Capital flows will be impeded. French banks will not do business in the US. UK banks may move into different markets. The center of the financial world will move away from New York. Perhaps this is what is wanted?
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