The notion that banks would improve their return on equity if they had a higher percentage of equity seems counterintuitive. The "proof" that Vice Chair Hoenig offers for this assertion is that other industries that have higher ROEs are less highly leveraged. The argument that a bank would make the same profits as a consumer/discretionary company if only it had the same debt/equity ratio does not seem compelling. There are reasons other than high leverage why banks' ROE might be low:…

Even though the scope is limited, FINRA's revisiting of the research rules is a positive development. It is important for regulators to be mindful of the fact that investment research may be distorted by conflicts of interest. An equally important consideration should be to encourage firms to produce research and commentary that is useful to investors. Rules that discourage the production of commentary, or that make it impossible for firms to profit economically from the production of…

It seems regulators are beginning to acknowledge that new regulations may have had some negative effects on the financial markets, financial market participants, investors and the economy. See, e.g., ; . This is a welcome development. It is the start of a conversation about the fact that some rules do more harm than good and that not every examination of a rule has to be a partisan or political event.

When even Governor Tarullo admits that Dodd-Frank is not working as planned, it is time for the last holdouts to concede that the statute could use a re-think. His grudging acknowledgment that the evidence is "more anecdotal than systematic" is almost amusing given how available it has been for years. See, e.g., . His admission of (at least potential) error (if one can call it that) should make it obvious that no one (whether in the private sector or in government) can…