Can Paul Volcker Fix the Balkanized U.S. Regulatory System?

Five years after the Dodd-Frank Wall Street Reform and Consumer Protection Act, regulatory reform is once again in the air. Senate Banking Committee chairman Richard Shelby is pushing a bill that could remove more than two dozen midsize banks from tougher scrutiny as systemically important financial institutions (SIFIs); Elizabeth Warren and David Vitter counter with a proposal to make it harder for the U.S. Federal Reserve Board to extend bailouts in a crisis; Rand Paul and Ted Cruz want to edit the Fed.

Paul Volcker wants to shake up the status quo as well — not to rein in the Fed or loosen the rules, but to streamline the U.S. financial regulatory system to toughen enforcement and prevent new risks from springing up in the shadow banking sector. "I think there are serious gaps and overlaps which lead to confusion and delay in decision making, and inadequate decisions," the former Fed chairman says at his Rockefeller Center office in New York.