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Financial regulation winners and losers

On the occasion of the financial regulatory bill becoming law Wednesday, I thought I'd repost this handy cheat sheet of which industries won and lost in this legislation.

The bottom line: the bill defers more to regulators than it actually forces structural changes at banks. On balance, the banks could've fared much worse. So do they go in the "winners" or "losers" column? We don't know how aggressively regulators will act to reduce risk at the banks. The bill leaves a lot to their judgment. But presuming the biggest banks will lose some revenue from the added regulation, we'll put them in the "losing" column -- for now.

Winners

-- Community banks: Exempt from the hefty regulatory fees assessed on larger banks and left mostly free of a new consumer watchdog's oversight.

-- Insurance and mutual fund companies: Exempt from the "Volcker rule," which restricts certain kinds of trading.

-- Movie industry: Won a ban on all trading of box office futures.

-- Derivatives exchanges: Mandatory clearinghouses for derivatives trades could increase business at places such as the Chicago Mercantile Exchange.

-- Institutional investors: Gain greater say over the makeup of corporate boards.

-- Auto dealers: Scored a major last-minute victory winning exemption from the consumer bureau's watch.

Losers

-- Big banks: The results could have been worse, but Goldman Sachs and J.P. Morgan Chase will still have to devise ways of making up for lost revenue after new rules on risky trading kick in.

-- Oil and mining companies: Hit by an eleventh-hour measure requiring them to disclose any payments to foreign governments related to energy projects abroad.

-- Credit card companies: Have far less power over fees charged to retailers on credit card transactions.

-- Mortgage lenders: Subject to greater scrutiny and more rules from the consumer protection watchdog.

By Jia Lynn Yang  |  July 21, 2010; 3:19 PM ET
Categories:  Financial regulation  
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Comments

actually small investors in value index funds will be big losers since banks and financial institutions which make up a large share of those indexes will be "dead" money.

Posted by: jibe | July 21, 2010 5:57 PM | Report abuse

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