WASHINGTON -- A little more than two years after the Dodd-Frank Wall Street reform bill was signed into law, a prominent Washington think tank has convened a broad range of policy experts to examine the law, to the extent that it has been implemented, and produce a substantive set of recommendations for lawmakers to consider as they mull updates to improve the financial regulatory landscape.

The Bipartisan Policy Center (BPC) on Thursday launched its Financial Regulatory Reform Initiative, an ambitious review of Dodd-Frank that aims to produce a series of white papers on various aspects of the law in 2013, leading up to a comprehensive report due out next fall.

Leaders of the initiative, which seeks to offer counsel to members of Congress, the executive branch and the regulatory agencies tasked with writing and implementing the rules provided for in the law, conceded that the effort will entail something of a balancing act as they weigh the proper extent of public safeguards without unduly burdening members of the financial sector.

"Obviously it's true at some level that there has to be a trade-off between stability and growth," said Martin Baily, a senior fellow at the Brookings Institution who previously served as chief economist to President Clinton and is co-chairing the BPC's Financial Regulatory Reform Initiative. Baily pointed to the reckless lending practices common to the mortgage-lending sector in the run-up to the financial collapse to make the case that effective government oversight is not necessarily at odds with the industry's growth agenda.

"To do that properly is not a hindrance on growth. In fact I think it helps you grow not to misallocate capital" as lenders had done ahead of the housing meltdown, he said.

"The appropriate balance only becomes revealed over time," added Phillip Swagel, a professor at the University of Maryland and former chief economist to Henry Paulson, treasury secretary under President George W. Bush at the onset of the financial crisis. "Hopefully we can shed some light on that debate," said Swagel, who is also co-chairing the BPC initiative.

The new effort comes in response to the widespread feeling across the political spectrum and from industry and consumer advocates alike that the hulking bill was an imperfect first attempt to rewrite the rules of the road for Wall Street. Sen. Mark Warner (D-Va.), a member of the Banking Committee who was a key figure in the drafting of the law, acknowledged as much in remarks at the launch event for the BPC initiative.

"I think looking back historically at any major piece of legislation, regardless of which party's in power, Congress never gets it right when you're looking at massive reform legislation the first time through," Warner said. "I think history is always replete with the notion that you directionally head into an area and then you come back two years, three years hence and do a corrections legislation."

Warner praised the BPC for convening the panel to review Dodd-Frank, and urged the participants to be candid in their recommendations to lawmakers and staffers. At the same time, he acknowledged that the reality on Capitol Hill today is gridlock, suggesting that no movement on any of the big issues, from Dodd-Frank to health care, energy to infrastructure, will occur until lawmakers reach some kind of agreement on debt and the deficit, particularly with the so-called fiscal cliff looming, a combination of automatic spending cuts and tax increases that members of both parties are desperate to avoid. Warner, for his part, is a member of the "gang of eight" lawmakers working to hammer out a framework that could win bipartisan support in the lame-duck session. Warner said that the group met last week in Virginia, laying odds at 80% that lawmakers will be able to strike a deal to avoid the sequestration that would bring the spending cuts.

Once that hurdle is cleared, Warner is hopeful that Congress can move past the calls for categorical repeal of Dodd-Frank (as well as Obama's health-care law) that have been heard on the campaign trail and in Washington from members on the right side of the aisle.

"The political context is such that it is either repeal or nothing, which is an absurd way to approach any major legislative activity," he said.

"I don't know what financial world they're living in. Nothing would be more disruptive to the markets. Nothing would send more of a chill, I believe, in terms of financial stability with all of the disruptions in Europe, with the downturns in China and India," he said. "[T]he notion that this new framework, as imperfect as it is, that we want to throw it out and go back to the pre-2008 rules, I don't think that'll happen regardless of who wins the election. I think calmer heads will prevail."

The members of the BPC initiative start with the premise that Dodd-Frank is here to stay, focusing on opportunities to improve the law rather than entertaining the idea of a wholesale repeal.

Their work will concentrate on five key provisions of the legislation: systemic risk, failure resolution, capital markets and the Volcker rule (so named for former Fed Chairman Paul Volcker and aimed to limit the risks for large banks from speculative investments), consumer financial protection and the regulatory structures in place.

That last area of focus, which would address issues such as the regulatory overlap between the Securities and Exchange Commission and the Commodities Futures Trading Commission, could also weigh in on where oversight of investment advisors should be housed, a subject of contentious debate earlier this year that figures to return in the next session of Congress. Lawmakers have variously backed legislation that would authorize the SEC to name one or more self-regulatory organizations to examine advisors, or would empower the SEC to collect user fees from industry practitioners and conduct the reviews itself.

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