Noble purposes

I really hate depending on hear-say. I'd much rather see for myself, so today I thought I'd take a look at Dodd-Frank to see what the fuss is about. It's a big bill. I consider myself a lousy writer, but seeing the text of this sure improves my self esteem. Let's just look at one part and it's noble purpose (text of bill follows commentary)...

They can take over a financial institution if it: could pose a threat to the financial stability of the United States.

How would that be possible if real competition existed? Isn't that the real problem?

It's possible, according to the bill, because of: (G) the nature, scope, size, scale, concentration, interconnectedness, and mix of the activities of the company;

Again, wouldn't real competition eliminate this possibility?

What about the proposed solution?: shall be supervised by the Board of Governors

So, no danger there. Replacing officers of the company (who should be in competition with other companies... mitigating collusion) with politician's assignees fixes the problem? How exactly?

Doesn't this exacerbate the problem of collusion? If not outright, in practice?

Interconnected, is what all economies are. Competition is the solution. 

============== START OF EXAMPLE ==============

SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REGULATION OF CERTAIN NONBANK FINANCIAL COMPANIES.

(a) U.S. Nonbank Financial Companies Supervised by the Board of Governors-

(1) DETERMINATION- The Council, on a nondelegable basis and by a vote of not fewer than 2/3 of the voting members then serving, including an affirmative vote by the Chairperson, may determine that a U.S. nonbank financial company shall be supervised by the Board of Governors and shall be subject to prudential standards, in accordance with this title, if the Council determines that material financial distress at the U.S. nonbank financial company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the U.S. nonbank financial company, could pose a threat to the financial stability of the United States.

(2) CONSIDERATIONS- In making a determination under paragraph (1), the Council shall consider--

(A) the extent of the leverage of the company;

(B) the extent and nature of the off-balance-sheet exposures of the company;

(C) the extent and nature of the transactions and relationships of the company with other significant nonbank financial companies and significant bank holding companies;

(D) the importance of the company as a source of credit for households, businesses, and State and local governments and as a source of liquidity for the United States financial system;

(E) the importance of the company as a source of credit for low-income, minority, or underserved communities, and the impact that the failure of such company would have on the availability of credit in such communities;

(F) the extent to which assets are managed rather than owned by the company, and the extent to which ownership of assets under management is diffuse;

(G) the nature, scope, size, scale, concentration, interconnectedness, and mix of the activities of the company;

(H) the degree to which the company is already regulated by 1 or more primary financial regulatory agencies;

(I) the amount and nature of the financial assets of the company;

(J) the amount and types of the liabilities of the company, including the degree of reliance on short-term funding; and

(K) any other risk-related factors that the Council deems appropriate.

============== END OF EXAMPLE ==============