Reforming Repo Rules

by Guest Author Mark Roe, Project Syndicate and Harvard Law School CAMBRIDGE – Sometimes, we just don’t learn. After the financial crisis, the United States enacted the Dodd-Frank Act to overhaul American financial regulation, with the aim of reducing the risk of another financial meltdown. But it did nothing to reform “repo” lending – arguably …

FDIC’s Frank-Dodd Fantasy

The FDIC has released a document that purports to show how it could have successfully resolved Lehman Brothers using its new Title II resolution authority granted under Dodd Frank.

All I can say is that this is an interesting piece of creative writing. The Lehman counterfactual rests on a series of assumptions, which as I will discuss shortly, look pretty questionable.