Unintended Consequences of Dodd-Frank, Volume 788,206


The law to end all financial unpleasantnesses has produced another one, according to a bunch of people employed by said law.

The Office of Financial Research, a new arm of the Treasury Department created by the 2010 Dodd-Frank law, said the system is vulnerable to repeats of what occurred in October, when tumult in the trading of US Treasury securities spread broadly to futures, swaps and options markets.

“Although the dislocation that peaked in mid-October was fleeting, we believe there is a risk of a repeat occurrence,” the office said in its third annual report, adding that such volatility “raises a host of financial stability concerns.”

US watchdog sees risk of repeated liquidity crunches [WSJ via Financial News]