{"id":23602,"date":"2017-09-05T13:29:57","date_gmt":"2017-09-05T20:29:57","guid":{"rendered":"https:\/\/www.itmtrading.com\/blog\/?p=23602"},"modified":"2018-12-21T02:07:38","modified_gmt":"2018-12-21T09:07:38","slug":"leverage-net-capital-rule-dodd-frank","status":"publish","type":"post","link":"https:\/\/www.itmtrading.com\/blog\/leverage-net-capital-rule-dodd-frank\/","title":{"rendered":"It\u00e2\u20ac\u2122s All About The Leverage &#8211; The Net Capital Rule And Dodd-Frank"},"content":{"rendered":"<p><iframe loading=\"lazy\" title=\"It\u2019s All About the Leverage\" width=\"625\" height=\"352\" src=\"https:\/\/www.youtube.com\/embed\/HKRdb-xN4lA?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<h4>9-5-17 It\u00e2\u20ac\u2122s All About the Leverage, by Lynette Zang<\/h4>\n<p>&nbsp;<\/p>\n<h3>Leverage, The Net Capital Rule,The Lehman Moment, And Dodd-Frank.<\/h3>\n<p>On April 28, 2004, under pressure from the largest broker dealers (Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley) the SEC approved the \u00e2\u20ac\u0153Net Capital Rule\u00e2\u20ac\u009d which allowed these entities exemptions that enabled them to dramatically increase leverage. Many believe this, in part, formed the foundation of the 2007 crisis.<\/p>\n<p>At that time Lehman was levered at 30:1 which only required a 3.3% downside of assets to push the firm into insolvency. On September 15, 2008 Lehman Brothers filed for bankruptcy. That is called the \u00e2\u20ac\u0153Lehman Moment\u00e2\u20ac\u009d.<\/p>\n<p>Do we have another Lehman Moment a head of us? Dodd-Frank legislation enacted during that time, though over 22,000 pages, is still being written and yet the recent Financial Choice Act of 2017 aims to dismantle those cumbersome regulations that keep a lid on leverage.<\/p>\n<p>In June 2017 the Federal Reserve stress tests revealed current leverage in the US banks. Are we better off? This webinar looks at current leverage ratios and just how far markets can drop before insolvency sparks the next financial crisis.<\/p>\n<h4>Slides And Links Regarding Financial Leverage :<\/h4>\n<div id=\"attachment_23605\" style=\"width: 970px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-23605\" class=\"size-full wp-image-23605\" src=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide1.jpg\" alt=\"Leverage\" width=\"960\" height=\"720\" srcset=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide1.jpg 960w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide1-300x225.jpg 300w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide1-768x576.jpg 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><p id=\"caption-attachment-23605\" class=\"wp-caption-text\"><strong>Slide 1<\/strong><\/p><\/div>\n<p><a href=\"https:\/\/www.sec.gov\/rules\/final\/34-49830.htm\" target=\"_blank\" rel=\"noopener noreferrer\"><u>https:\/\/www.sec.gov\/rules\/final\/34-49830.htm<\/u><\/a><\/p>\n<p><a href=\"http:\/\/www.nytimes.com\/2008\/10\/03\/business\/03sec.html?mcubz=1\" target=\"_blank\" rel=\"noopener noreferrer\"><u>http:\/\/www.nytimes.com\/2008\/10\/03\/business\/03sec.html?mcubz=1<\/u><\/a><\/p>\n<p><a href=\"http:\/\/www.nytimes.com\/interactive\/2008\/09\/28\/business\/20080928-SEC-multimedia\/index.html\" target=\"_blank\" rel=\"noopener noreferrer\"><u>http:\/\/www.nytimes.com\/interactive\/2008\/09\/28\/business\/20080928-SEC-multimedia\/index.html<\/u><\/a><\/p>\n<div id=\"attachment_23606\" style=\"width: 970px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-23606\" class=\"size-full wp-image-23606\" src=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide2.jpg\" alt=\"Leverage\" width=\"960\" height=\"720\" srcset=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide2.jpg 960w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide2-300x225.jpg 300w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide2-768x576.jpg 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><p id=\"caption-attachment-23606\" class=\"wp-caption-text\"><strong>Slide 2<\/strong><\/p><\/div>\n<p><a href=\"https:\/\/financialservices.house.gov\/uploadedfiles\/2017-04-24_financial_choice_act_of_2017_comprehensive_summary_final.pdf\" target=\"_blank\" rel=\"noopener noreferrer\"><u>https:\/\/financialservices.house.gov\/uploadedfiles\/2017-04-24_financial_choice_act_of_2017_comprehensive_summary_final.pdf<\/u><\/a><\/p>\n<div id=\"attachment_23607\" style=\"width: 970px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-23607\" class=\"size-full wp-image-23607\" src=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide3.jpg\" alt=\"Leverage\" width=\"960\" height=\"720\" srcset=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide3.jpg 960w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide3-300x225.jpg 300w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide3-768x576.jpg 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><p id=\"caption-attachment-23607\" class=\"wp-caption-text\"><strong>Slide 3<\/strong><\/p><\/div>\n<p><a href=\"https:\/\/portal.hud.gov\/hudportal\/HUD?src=\/press\/press_releases_media_advisories\/2017\/HUDNo_17-068\" target=\"_blank\" rel=\"noopener noreferrer\"><u>https:\/\/portal.hud.gov\/hudportal\/HUD?src=\/press\/press_releases_media_advisories\/2017\/HUDNo_17-068<\/u><\/a><\/p>\n<p><a href=\"https:\/\/www.clarusft.com\/supplementary-leverage-ratio-comparing-us-banks\" target=\"_blank\" rel=\"noopener noreferrer\"><u>https:\/\/www.clarusft.com\/supplementary-leverage-ratio-comparing-us-banks<\/u><\/a><\/p>\n<div id=\"attachment_23609\" style=\"width: 970px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-23609\" class=\"size-full wp-image-23609\" src=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide4-1.jpg\" alt=\"Leverage\" width=\"960\" height=\"720\" srcset=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide4-1.jpg 960w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide4-1-300x225.jpg 300w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide4-1-768x576.jpg 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><p id=\"caption-attachment-23609\" class=\"wp-caption-text\"><strong>Slide 4<\/strong><\/p><\/div>\n<p>There Is No Link Associated With This Slide.<\/p>\n<div id=\"attachment_23610\" style=\"width: 970px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-23610\" class=\"size-full wp-image-23610\" src=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide5.jpg\" alt=\"Leverage\" width=\"960\" height=\"720\" srcset=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide5.jpg 960w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide5-300x225.jpg 300w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide5-768x576.jpg 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><p id=\"caption-attachment-23610\" class=\"wp-caption-text\"><strong>Slide 5<\/strong><\/p><\/div>\n<p><a href=\"https:\/\/www.occ.gov\/topics\/capital-markets\/financial-markets\/derivatives\/dq117.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/www.occ.gov\/topics\/capital-markets\/financial-markets\/derivatives\/dq117.pdf<\/a><\/p>\n<div id=\"attachment_23612\" style=\"width: 970px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-23612\" class=\"size-full wp-image-23612\" src=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide6.jpg\" alt=\"Leverage\" width=\"960\" height=\"720\" srcset=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide6.jpg 960w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide6-300x225.jpg 300w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide6-768x576.jpg 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><p id=\"caption-attachment-23612\" class=\"wp-caption-text\"><strong>Slide 6<\/strong><\/p><\/div>\n<p><a href=\"https:\/\/www.occ.gov\/topics\/capital-markets\/financial-markets\/derivatives\/dq117.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/www.occ.gov\/topics\/capital-markets\/financial-markets\/derivatives\/dq117.pdf<\/a><\/p>\n<div id=\"attachment_23613\" style=\"width: 970px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-23613\" class=\"size-full wp-image-23613\" src=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide7.jpg\" alt=\"Leverage\" width=\"960\" height=\"720\" srcset=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide7.jpg 960w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide7-300x225.jpg 300w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide7-768x576.jpg 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><p id=\"caption-attachment-23613\" class=\"wp-caption-text\"><strong>Slide 7<\/strong><\/p><\/div>\n<p><a href=\"https:\/\/financialservices.house.gov\/uploadedfiles\/2017-04-24_financial_choice_act_of_2017_comprehensive_summary_final.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/financialservices.house.gov\/uploadedfiles\/2017-04-24_financial_choice_act_of_2017_comprehensive_summary_final.pdf<\/a><\/p>\n<p><a href=\"https:\/\/www.brookings.edu\/blog\/up-front\/2017\/06\/13\/what-treasurys-financial-regulation-report-gets-right-and-where-it-goes-too-far\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/www.brookings.edu\/blog\/up-front\/2017\/06\/13\/what-treasurys-financial-regulation-report-gets-right-and-where-it-goes-too-far<\/a><\/p>\n<div id=\"attachment_23614\" style=\"width: 970px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-23614\" class=\"size-full wp-image-23614\" src=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide8.jpg\" alt=\"Leverage\" width=\"960\" height=\"720\" srcset=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide8.jpg 960w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide8-300x225.jpg 300w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide8-768x576.jpg 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><p id=\"caption-attachment-23614\" class=\"wp-caption-text\"><strong>Slide 8<\/strong><\/p><\/div>\n<p><a href=\"https:\/\/www.reuters.com\/article\/uk-markets-flows-baml\/liquidity-supernova-keeping-markets-afloat-europe-in-demand-baml-idUKKBN17N138\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/www.reuters.com\/article\/uk-markets-flows-baml\/liquidity-supernova-keeping-markets-afloat-europe-in-demand-baml-idUKKBN17N138<\/a><\/p>\n<p><a href=\"https:\/\/www.yardeni.com\/pub\/peacockfedecbassets.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/www.yardeni.com\/pub\/peacockfedecbassets.pdf<\/a><\/p>\n<div id=\"attachment_23615\" style=\"width: 970px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-23615\" class=\"size-full wp-image-23615\" src=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide9.jpg\" alt=\"Leverage\" width=\"960\" height=\"720\" srcset=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide9.jpg 960w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide9-300x225.jpg 300w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide9-768x576.jpg 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><p id=\"caption-attachment-23615\" class=\"wp-caption-text\"><strong>Slide 9<\/strong><\/p><\/div>\n<p><a href=\"https:\/\/www.cnbc.com\/2017\/01\/18\/narrowest-dow-range.html\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/www.cnbc.com\/2017\/01\/18\/narrowest-dow-range.html<\/a><\/p>\n<p><a href=\"https:\/\/www.algebris.com\/silver-bullet-low-volatility-trap\/\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/www.algebris.com\/silver-bullet-low-volatility-trap\/<\/a><\/p>\n<div id=\"attachment_23617\" style=\"width: 970px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-23617\" class=\"size-full wp-image-23617\" src=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide10-1.jpg\" alt=\"Leverage\" width=\"960\" height=\"720\" srcset=\"https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide10-1.jpg 960w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide10-1-300x225.jpg 300w, https:\/\/www.itmtrading.com\/blog\/wp-content\/uploads\/2017\/09\/Slide10-1-768x576.jpg 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><p id=\"caption-attachment-23617\" class=\"wp-caption-text\"><strong>Slide 10<\/strong><\/p><\/div>\n<p><a href=\"https:\/\/www.imf.org\/external\/pubs\/ft\/scr\/2016\/cr16189.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/www.imf.org\/external\/pubs\/ft\/scr\/2016\/cr16189.pdf<\/a><\/p>\n<p><a href=\"http:\/\/www.imf.org\/external\/pubs\/ft\/wp\/2013\/wp1301.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">http:\/\/www.imf.org\/external\/pubs\/ft\/wp\/2013\/wp1301.pdf<\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>9-5-17 It\u00e2\u20ac\u2122s All About the Leverage, by Lynette Zang &nbsp; Leverage, The Net Capital Rule,The Lehman Moment, And Dodd-Frank. On April [&hellip;]<\/p>\n","protected":false},"author":23,"featured_media":25739,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1207],"tags":[1634,1635,1642,1643],"class_list":["post-23602","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-lynette-zang-youtube","tag-itm-trading-youtube","tag-flash-in-five","tag-financial-leverage"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/23602","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/comments?post=23602"}],"version-history":[{"count":7,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/23602\/revisions"}],"predecessor-version":[{"id":23622,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/23602\/revisions\/23622"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media\/25739"}],"wp:attachment":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media?parent=23602"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/categories?post=23602"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/tags?post=23602"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}