Sen. Dodd’s new financial regulation package is out and about. What does it mean? What does it do? What will it change? Will it work? The analysis has only just begun. We can start by recognizing that the Dodd legislation aims to add “layers of oversight.” It’s already delivered layers of paper (the actual bill is 1,336 pages).

Here’s how the NY Times profiled the new legislation: “The plan would create a nine-member council, led by the Treasury secretary, to watch for systemic risks, and direct the Federal Reserve to supervise the nation’s largest and most interconnected financial institutions, not just banks.” That’s a rather tall order, and it implies that the existing regulatory order, already a rather large and complex system, doesn’t already address such issues, at least in theory. At least there’s no claims to pursue world peace simultaneously.
In any case, we need to bit off this beast in small chunks. Let’s take it slow, starting with this short Q&A from the Washington Post on the “6 key points of the financial regulation legislation.”