Barry Adler: April 2010 Archives

Prisoners of Our Own Device

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by Barry Adler

The Dodd bill, just released by the Senate Banking Committee, would impose extensive new restrictions on the provision of financial services in the United States. These restrictions represent a fair price to pay for institutions that desire government backing, but they may prove insufficiently effective and unnecessarily stifling to companies that would prefer to go without government support.

To illustrate this point, consider what has come to be known as the Hotel California Provision, under which bank holding companies that have received TARP funds would be unable to avoid Federal Reserve supervision even if they eliminated their banks.  In the words of the iconic pop lyrics: "You can check out any time you like, but you can never leave."


The Dodd-Frank Act, signed into law in July 2010, represented the most significant and controversial overhaul of the U.S. financial regulatory system since the Great Depression. Forty NYU Stern faculty, including editors Viral V. Acharya, Thomas F. Cooley, Matthew P. Richardson, and Ingo Walter, provide a definitive analysis of the Act, expose key flaws and propose solutions to inform the rules’ adoption by regulators, in a new book, Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance (Wiley, November 2010).

About Restoring Financial Stability

Previously, many of these faculty developed 18 independent policy papers offering market-focused solutions to the financial crisis, which were published in a book, Restoring Financial Stability: How to Repair a Failed System (Wiley, March 2009).

About the Authors