Daniel Tarullo, a member of the Federal Reserve’s board of governors, said this week that Dodd-Frank should only be a starting point for financial regulation.
“The statute itself provides only limited guidance to regulators on how to implement financial stability where it is established as a standard, or how to weigh it against economic growth and other considerations where it is used,” Tarullo said, MNI News reports.
Tarullo, speaking at the University of Pennsylvania Law School, called Dodd-Frank implementation a continuing challenge and said that “cross-pollination” of academic and legal experts is needed to create regulatory concepts needed to accomplish its goals.
The law, Tarullo said, “does not delineate the steps that should actually be taken to promote financial stability,” but there are “relatively few Dodd-Frank provisions that more less directly effect the policy changes intended to reduce the risks to financial stability,” according to MNI News.
Even the Volcker rule, Tarullo said, will still require regulatory build-out before its constraints are clear.
Tarullo added that the Basel Committee was more cautious than he believes was necessary.
“For all the attention paid to financial stability analysis in the last few years, it is still – relatively speaking – a fledgling enterprise,” Tarullo said, according to MNI News.