It is hard to understand the FRB's rationale for treating margin held in segregation by a swap dealer as the equivalent of an unsecured borrowing by a swap dealer. Perhaps the FRB believes that requiring more capital is better, even if, from the standpoint of risk, the requirement cannot be justified.

However, the argument that more is better does not make the economy any safer, since the increased capital requirement results in higher costs that must be passed on to commercial users…

This excellent article should be read by anyone who is involved in financial regulation, whether at the political or regulatory level (or in the press).

Professor Tuckman is clear and to the point in his explanations as to (i) the benefits that derivatives provide (as well as their potential risks); (ii) the limited role that derivatives played in the financial crisis; and (iii) why a number of the measures taken by financial regulators to address systemic risk (e.g., mandatory…

The proposed IEX exchange was made famous by the book Flash Boys, which attempted to beatify its founders by demonizing everyone else. Now that IEX has put forward a formal proposal, it will be interesting to see how the SEC reacts to a set of exchange rules that (at least in the view of FIA) do not conform to the automation requirements of Regulation NMS.

It is good to disclose information about bad guys quickly. The question is whether accused employees have enough opportunity to rebut any negative statements made about them. Establishing a balance between these two concerns is not easy, but employees' rights and concerns should be given more attention under current practice.