Despite the fact that there was a major financial crisis that resulted in one of the deepest recessions in a century, the right way to fix the sector was controversial. But earlier this month, Congress finalized the Frank-Dodd bill, which hopes to institute regulations that will at least get the market part of the way to better stability. But what does the financial industry think of these new rules? After all, a stable financial system is more in its best interest than any other industry. A series of polls conducted by Deloitte and Touche this week provides a glimpse of the sector's views.
Deloitte held a call for financial services firms during which it explained many of the bill's highlights. There were nearly 4,000 financial services professionals on the call, and the online presentation included embedded, real-time poll questions for participants to respond to. Here are a few key questions and the results.
First, does the regulation have any benefit? Those on the call appeared a little cynical:
Just 32.5% of those watching the presentation were convinced the new regulations would help. Of course, only 33.1% felt sure they wouldn't. The other one-third was uncertain.
One of the chief purposes of the bill is to reduce systemic risk in the financial system. Do the industry employees listening think it will work? Here are the results:
Just 8.4% said "yes!" But again, only 33.8% said "no" -- barely one-third. More than a majority simply aren't sure how the bill will affect systemic risk.
Another major provision of the legislation was to establish a Consumer Financial Protection Bureau. Of course, the goal there was to enhance consumer protection. Did participants think the new agency would achieve this basic objective?
Only 40.8% think the new bureau will make consumers safer. Though that's more participants than believe it will fail. Again, a large portion of those polled just don't know.
Finally, which aspects of the financial industry will the legislation change?
It's a pretty even spread among those options listed, with none clearly dominating -- except for the final choice. Close to half of participants weren't sure.
If you haven't noticed, uncertainty is a sort of major theme throughout all of these questions. If there's anything that these polls made clear, it's that the financial regulation bill hasn't eliminated uncertainty -- the bill has increased it. Financial services firms are still trying to get their heads around what the bill means for them. Certainty won't come soon either, as regulators will continue to refine the new rules for the next several years.