The District Court's harsh rejection of FSOC's analysis of MetLife motivates a reexamination of that analysis and other commentary on it. One of the more detailed public reviews of FSOC's analysis was produced by Peter Wallison (see published in The Wall Street Journal on July 7, 2015). His specific criticism of the FSOC analysis, e.g., with respect to securities lending, is a reasoned indictment of FSOC's ability to understand the…

Given how much discretion the Dodd-Frank Act affords FSOC to create its own rules, the Court's finding that the FSOC failed to follow those rules is nothing less than embarrassing.

The decision casts doubt on whether FSOC and its closely related affiliate (also established by Dodd-Frank), the Office of Financial Research, (i) can provide any meaningful value and (ii) are really more political creatures than regulatory or academic entities. FSOC's annual reports on the…

 is problematic. The proposal would establish a regulatory standard that could not possibly be met by anyone regardless of their level of diligence or knowledge. The proposal opens the door for the NYSDF to bring enforcement actions against any bank and any AML compliance officer at any time. Mr. Hammerman may be understating the consequences of this type of regulation for filling senior compliance positions. Put differently, the only individuals who would accept positions as AML…

The problems that Professor Pirrong points out with respect to positions held at multiple CCPs are analogous to the credit problems that are caused by regulations that require that a financial group book its derivative transactions into multiple subsidiaries with a single counterparty. A regulatory scheme that, for example, allowed a financial group to book all of its derivatives with a counterparty into a single entity (typically, a bank) would be far safer than a system (such as we have…