Tweet
Henry gives his usual comprehensive look at current financial issues. This time it's the Dodd-Frank Reform Bill . . .
The proposed act, which came to be known as the Dodd-Frank Act, was passed on December 2, 2010, as a legislative response to the global financial market crisis that began in the US in mid-2007 and the global recession that followed, was presented as the most sweeping reform of financial regulation in the United States since the New Deal that Franklin D Roosevelt put together in the midst of the Great Depression after the market crash of 1929.
The new bill aimed at effectuating a paradigm shift in the loose US financial regulatory environment that had resulted from the steady dismantlement of New Deal governmental regulation on financial markets during the decades of market liberalization the eventually led to global systemic financial market failures in mid 2007. The proposed bill was intended to protect both the US financial system and the US investing public from practices that led to excessive systemic risk. The bill also aimed at curbing rampant moral hazard, which occurs when institutions, insulated from the consequences of risk, behave differently and recklessly than it otherwise would if they were fully exposed to the consequences of their risk taking.
Moral hazard, coupled with Federal Reserve loose monetary policy of easy money, had fueled the emergence of structured finance that led to the debt bubble, the bursting of which forced the government to bailout distressed "too-big-to-fail" institutions with taxpayer money in order to avert a systemic meltdown.
The new bill also aimed at re-establishing the largely dismantled New Deal era mandate for Federal financial regulatory agencies to reactivate procedures of effective systemic market risk management that will affect practically every aspect of the nation's post-crisis financial services industry going forward.
On July 21, 2010, three years after the financial crisis broke out in July 2007, President Obama signed into law the 2,300-page-long Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173, Dodd-Frank Act), passed by the Democrat-controlled congress, four months before Obama's first mid-term elections.
The stated aim of the Dodd-Frank Act is: "To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end "too big to fail", to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes."
http://www.atimes.com/atimes/Global_.../MB03Dj03.html
The proposed act, which came to be known as the Dodd-Frank Act, was passed on December 2, 2010, as a legislative response to the global financial market crisis that began in the US in mid-2007 and the global recession that followed, was presented as the most sweeping reform of financial regulation in the United States since the New Deal that Franklin D Roosevelt put together in the midst of the Great Depression after the market crash of 1929.
The new bill aimed at effectuating a paradigm shift in the loose US financial regulatory environment that had resulted from the steady dismantlement of New Deal governmental regulation on financial markets during the decades of market liberalization the eventually led to global systemic financial market failures in mid 2007. The proposed bill was intended to protect both the US financial system and the US investing public from practices that led to excessive systemic risk. The bill also aimed at curbing rampant moral hazard, which occurs when institutions, insulated from the consequences of risk, behave differently and recklessly than it otherwise would if they were fully exposed to the consequences of their risk taking.
Moral hazard, coupled with Federal Reserve loose monetary policy of easy money, had fueled the emergence of structured finance that led to the debt bubble, the bursting of which forced the government to bailout distressed "too-big-to-fail" institutions with taxpayer money in order to avert a systemic meltdown.
The new bill also aimed at re-establishing the largely dismantled New Deal era mandate for Federal financial regulatory agencies to reactivate procedures of effective systemic market risk management that will affect practically every aspect of the nation's post-crisis financial services industry going forward.
On July 21, 2010, three years after the financial crisis broke out in July 2007, President Obama signed into law the 2,300-page-long Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173, Dodd-Frank Act), passed by the Democrat-controlled congress, four months before Obama's first mid-term elections.
The stated aim of the Dodd-Frank Act is: "To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end "too big to fail", to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes."
http://www.atimes.com/atimes/Global_.../MB03Dj03.html