§5333 Study of the Effects of Size and Complexity of Financial Institutions on Capital Market Efficiency and Economic Growth

Summary

The Chairperson of the Council must study how rules aimed at reducing systemic risk in big financial firms would affect the economy. The study must estimate the benefits and costs of such rules for how well capital markets work, for the financial sector, and for national economic growth. It must cover eight kinds of limits, for example: caps on the size of banks and holding companies, limits on how complex or diversified firms can be, rules to separate business units to make failures easier to handle, limits on moving risk between units, requirements for backup capital, limits on mixing commercial and financial work, separating traditional banking from risky trading, and similar limits. The study must also give recommendations on how to design the first five types of limits so they work best and cause the least economic harm. The Chairperson must send a report to Congress by the end of the 180-day period that began on July 21, 2010, and then every 5 years after that.