This week, as we all know, was election week, and the results, while perhaps not shocking, are sure to send a surge of changes down Wall Street yet again, but how big are these changes really going to be?
While the Republicans now control the House, the control of the Senate still lies with the Democrats. So really what do all of the election results mean for financial regulations, big banks and derivatives? Will the Dodd-Frank Bill still remain intact? Will Fannie and Freddie cease to exist? Will Derivatives be traded over an exchange?
I’ve been reading articles all week to see if any of these questions could be answered, and I could not really find anything definitive. Some people are saying that we shouldn’t expect any “significant” changes to the Dodd-Frank Bill, but we should expect financial regulation to be changing over the long haul. Others say that while some parts of the Dodd-Frank bill will most likely remain intact, parts such as the Volcker Rule will lose some of its effectiveness and be weakened over the course of the next year or so.
Derivatives are another subject area of political debate, and it seems Republicans are being seen as sympathizers for traders and banks in this area. It has been said that some exemptions may apply to derivatives and how they are traded. This will surely take away from the new goal of achieving greater transparency.
As for Fannie and Freddie, really as far as I can tell, no one will ever have a straight answer on this one.
So yes I’ve read the articles, and I’ve seen the different sides of what this election could or could not do for our financial system, but now I thought I would ask, what do you think? You voted this week, it went your way or maybe it didn’t, but now that all of the votes have been cast and counted, where do you think our financial system is headed?