If any publicity is good publicity, the Dodd-Frank Act got a healthy shot in the arm from the two candidates for U.S. president during their first debate on Wednesday, with each contender discussing financial regulation at length.

“You have to have regulation, and there are some parts of Dodd-Frank that make all the sense in the world,” former Massachusetts Gov. Mitt Romney said. “You have to have transparency, leverage limits.”

But Romney was mostly critical of the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed under President Barack Obama’s first term. A key criticism was that parts of the act are vague and undefined, leaving the markets to decipher what it means to be compliant. Yet Romney didn’t offer much detail about his own plans for financial reform.

A federal court was much more specific when striking down part of Dodd-Frank last week.

Hammering Out the Details

The U.S. Commodity Futures Trading Commission had not adequately rationalized its constraints on energy commodity bets -- set to take effect next week -- according to U.S. District Judge Robert Wilkins. “The Dodd-Frank amendments do not constitute a clear and unambiguous mandate to set position limits, as the Commission argues,” Wilkins said.

Another key repercussion of Dodd-Frank could be problematic for electronic traders: moving instruments currently traded over the counter to more centralized trading platforms. Electronic trading typically requires broader disclosure of trading interest to encourage competition, according to the University of California, Berkeley’s Dr. Terrence Hendershott, who has studied potential impacts of Dodd-Frank.

The Healing is in the Details

New Dodd-Frank regulations feature “lots of belts and suspenders” that inhibit risk-taking in the market, Goldman Sachs chief Lloyd Blankfein said last month. Romney seemed similarly displeased with the scope and ambiguity of Dodd-Frank during Wednesday’s debate.

But a patient isn’t likely to stop one course of treatment in favor of another without knowing specifics. The financial services industry is undergoing much-needed therapy, and it knows little to nothing about the alternative.

“Such an enormous economic crisis was prompted by reckless behavior across the board,” Obama said. “Does anybody out there think that the big problem we had is that there was too much oversight and regulation of Wall Street?”

Related Articles:

“Romney stresses he wants bank regulation, but slams Obama reforms” by  Lucia Mutikani

“Judge Nixes New CFTC Trading Curbs” by Jamila Trindle

“Goldman’s Blankfein: ‘Gotcha’ Culture Detrimental to Growth” by Liz Moyer