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The Text of the Dodd-Frank Act
International Association of
Risk and Compliance Professionals (IARCP)
Dodd Frank Act Section 123
SEC. 123. STUDY OF THE EFFECTS OF
SIZE AND COMPLEXITY OF FINANCIAL INSTITUTIONS ON CAPITAL MARKET
EFFICIENCY AND ECONOMIC GROWTH.
(a)
STUDY REQUIRED.—
(1)
IN GENERAL.—The Chairperson of the
Council shall carry out a study of the economic impact of possible
financial services regulatory limitations intended to reduce
systemic risk.
Such study shall estimate the benefits and
costs on the efficiency of capital markets, on the financial
sector, and on national economic growth, of—
(A) explicit
or implicit limits on the maximum size of banks, bank holding
companies, and other large financial institutions;
(B)
limits on the organizational complexity and diversification of
large financial institutions;
(C) requirements for
operational separation between business units of large financial
institutions in order to expedite resolution in case of failure;
(D) limits on risk transfer between business units of large
financial institutions;
(E) requirements to carry
contingent capital or similar mechanisms;
(F) limits on
commingling of commercial and financial activities by large
financial institutions;
(G) segregation requirements
between traditional financial activities and trading or other
high-risk operations in large financial institutions; and
(H) other limitations on the activities or structure of large
financial institutions that may be useful to limit systemic risk.
(2) RECOMMENDATIONS.—The study
required by this section shall include recommendations for the
optimal structure of any limits considered in subparagraphs (A)
through (E), in order to maximize their effectiveness and minimize
their economic impact.
(b) REPORT.—Not
later than the end of the 180-day period beginning on the date of
enactment of this title, and not later than every 5 years
thereafter, the Chairperson shall issue a report to the Congress
containing any findings and determinations made in carrying out
the study required under subsection (a).
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