There is always talk that onerous regulations will lead global Wall Street firms to engage in a kind of regulatory arbitrage and shift trading operations to the most favorable regions. Not too long ago, the many vociferous critics of Sarbanes-Oxley (Sarbanes-Oxley news) argued that the law was pushing companies to list on London 's AIM and not in the U.S. It turns out, the argument was overblown. But with the historic Dodd-Frank bill likely to pass, some are wondering if firms will start to shift trading away from the U.S.

The AP notes that Europe does not loom as a likely destination. Governments there "are already pledging to crack down on risk-taking bankers in the hopes of warding off more expensive bailouts. A European plan for new regulation could be in place in a month, with approval perhaps a year away." The government in Britain also plans to levy a new tax on the assets of the biggest banks, not to mention the one-time 50 percent tax on large bank bonuses.

Asia is more friendly from a regulatory perspective but so far anyway its technology has sorely lagged the U.S. and Europe. My sense is that we won't see any shifting at all, even in derivatives and CDSs. The push to clearinghouses isn't that onerous, especially when the top dealers own the top clearinghouse.

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