Paul Singer Elliott Management

Paul Singer “You inevitably realize that gigantic risks exist to be revealed in the next GFC”

Elliott Management’s Paul Singer has been among a few major figures in the financial world to make a stand against noncleared big bank derivatives. His concern for “financial system soundness,” seen by ValueWalk in the fund’s fourth quarter investor letter, crosses many lines. He wholeheartedly backs the simplification of Dodd-Frank, pointing to obfuscation of regulatory intent and complexity as a potential danger to financial stability. The letter touches multiple “third-rail” Wall Street topics that are seldom allowed to be discussed in the public domain.

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2016 Hedge Fund Letters
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Paul Singer - Dodd-Frank was a law that instructed regulators to write the law, with intentional confusion the result
In the wake of the 2008 global financial crisis, lawmakers strove to make those involved in the financial system’s meltdown accountable to some degree. The much-criticized process used to create Dodd-Frank, a law that mandates regulators determine the law, shouldn't come as a surprise. Restricting banks in this regards has always been a third-rail of politics on Capital Hill.

The recent trend to make the legal and regulatory process unnecessarily more complex is just another piece in this puzzle. Singer thinks Dodd-Frank, which is currently on the chopping block under the Trump administration, is one such example.

Paul Singer called Dodd-Frank, the cornerstone of Obama Administration financial regulation, “nearly a thousand pages of vague legislative directives that handed excessive discretion to unaccountable regulators who have since written thousands of more pages of nearly incomprehensible rules governing the financial markets.”

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