Singh, Dalvinder --- "The US Architecture of Bank Regulation and Supervision: Recent Reforms in their Historical Context" [2011] ELECD 506; in LaBrosse, Raymond John; Olivares-Caminal, Rodrigo; Singh, Dalvinder (eds), "Managing Risk in the Financial System" (Edward Elgar Publishing, 2011)

Book Title: Managing Risk in the Financial System

Editor(s): LaBrosse, Raymond John; Olivares-Caminal, Rodrigo; Singh, Dalvinder

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9780857933812

Section: Chapter 21

Section Title: The US Architecture of Bank Regulation and Supervision: Recent Reforms in their Historical Context

Author(s): Singh, Dalvinder

Number of pages: 17

Extract:

21. The US architecture of bank
regulation and supervision: recent
reforms in their historical context
Dalvinder Singh

The US system of prudential regulation and supervision of banking is
without doubt a complex structure ­ it is not centralized in a single regu-
lator but is the responsibility of a number of separate and independent
regulators. In the early periods of the financial crisis of 2007 a number
of proposals were put forward for wholesale reform of the US regulatory
system. These proposals were to improve the effectiveness of the regula-
tory structure and to simplify the financial regulatory structure oversee-
ing the financial system in the post-Gramm-Leach-Bliley Act 1999 (GLB)
world of large complex financial conglomerates. The proposals took the
form of either a twin peaks model or a single regulator model.1 The debate
about regulatory reform once again took centre stage during the recent
financial crisis. This chapter explores some of the key features of the Dodd-
Frank Act 2010 and then reflects on the historical resistance to wholesale
architectural reform of the system of regulation. It seems as though history
has repeated itself and the status quo remains and we explore why that is
the case given the severity of this financial crisis.


21.1. THE HISTORICAL MOVES TOWARDS
REGULATORY CONSOLIDATION

The move towards regulatory consolidation in the banking system dates
back to the 1930s and continued intermittently into the 1990s.2 However,
this has been unsuccessful due to the underlying confidence in the regula-
...