---
title: "Trading a new Dodd-Frank Act"
url: https://arb-maker.com/archives/4681/
description: "Trading a new Dodd-Frank Act Posted by Admin on Feb 6, 2017 in ArbMaker News! | No Comments “The key elements of the Dodd-Frank Act in the cross hairs of…"
published: 2026-08-10
updated: 2026-08-10
---

# Trading a new Dodd-Frank Act

Published 2026-08-10

Posted by Admin on Feb 6, 2017 in ArbMaker News!

*“The key elements of the Dodd-Frank Act in the cross hairs of President Trump (and his intentions towards these) are:*

- *The stress tests: relax them*
- *The Volker Rule: redefine (at least) the rule and permit banks to make speculative investments with deposit insured funds*
- *The Fiduciary Rule: enters into force this April and would stop the sale of high fee & commission products in the name of greater choice*

*Clearly, if you are in the banking and investment business such changes would mean more profit. At what cost is another matter.”*

That excerpt comes from tomorrow’s edition of our research newsletter along with a specific trade idea close to execution. A trial accessing the research can be obtained [here](https://arb-maker.com/get-the-premium-newsletter).

A broader concern in the discussion of Dodd-Frank is would such changes be, on balance, a good turn of policy? It is easy to see how they might not.

- For example, relaxing the stress tests is a step towards greater bank sector consolidation and thus increased too-big-to-fail risk. By what process might this occur? Well, should the threshold defining “systematically important financial institutions” (SIFIs) be raised it will promote M&A activity that creates larger entities that flirt with, but do not meet, SIFI status. Such new entities raise consolidation risk incrementally.

- Reinterpreting or abolishing the Volker Rule risks going all the way back to the mixing of commercial and investment bank activities that the Glass-Seagall Act abolished after the Great Depression. Glass-Seagall was specifically intended to create a firewall between customer deposits and bank speculation with those funds. Its systematic erosion in the name of “competitiveness” was a material factor in the 2007 to 2009 crisis.

- It is difficult to accept as serious an argument that suggests an incentivised salesmen sets out the case between a high commission product and a lower commission product evenhandedly. The contrary assumption has been seen before, very recently, in the subprime mortgage market. The Fiduciary Rule is due to take effect this April. A still birth would be a cause for concern.

There are usually ways existing regulatory legislation can be finessed for the greater good. With these three elements doing so requires great care.

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