Regulation with a Clap of Thunder and a Massive Hammer

Two important events happened in November 2013. First, the Fed released its latest stress test definitions, to be used as the basis of blogthe Comprehensive Capital and Analysis Review (CCAR) report, due in March 2014. Second, Thor returned to cinema screens in the action sequel, ‘The Dark World.’ So, why are these two things collectively important?

While seemingly unrelated, Thor is actually a remarkable and timely metaphor for modern regulatory practice: protect the system first, the system’s participants second, and remember to carry a big hammer.

To understand the connection, it is important to explore what Thor represents. Continue reading “Regulation with a Clap of Thunder and a Massive Hammer”