Dodd Frank Pros And Cons

On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is commonly referred as the Dodd-Frank Act. This act was passed as a response to the Great Recession in order to prevent potential financial debacle in the future. This regulation has a significant impact on American financial services industry by placing major changes on the financial regulation and agencies since the Great Depression. This paper examines the history and impact of Dodd-Frank Act on American financial services industry.

A survey of 37 economists conducted by the University of Chicago in 2014, for example, found that nearly all believed that without the stimulus, the unemployment rate would have risen higher than it did.” In addition to this, President Obama strategized new regulations to protect consumers and to prevent another financial crisis. In 2009 and 2010, he signed the Credit Card Accountability Responsibility and Disclosure Act, the Dodd-Frank Wall Street Reform and the Consumer Protection Act into law. The CCARD Act restricted and obligated interest rates on credit card companies and obligated them to enact transparent policies. The Dodd-Frank created the Financial Stability Oversight Council and the Consumer Financial Protection Bureau which could disintegrate banks if it was possible to fail for any reason including but not limited to subprime loans.

After our throughout research on Basel III regulation and it’s pros and cons, our group came to the conclusion that Basel III indeed made the banking system to become more stable and safe compared to the time where there is no Basel III regulation. Before we begin to defense our standpoint, we would like to have a short review of what exactly Basel III is.

While there are many more provisions and over 2000 pages included in the Dodd Frank Act most of these provisions have yet to be implemented. The Know before You Owe Act and the Credit Card Act are two provisions that one can actually see the change and progress happening within these acts. These provisions are two examples on just how beneficial the Dodd Frank Act is and will continue to be towards consumers. This act helps consumers to understand and know just what they are purchasing and nothing is hidden so that brokers and banks can’t take advantage of consumers like what happened in 2007 and

The Dodd-Frank Act was enacted to deal with the various problems occurred in the financial crisis. The paramount reason I choose this law is it has brought the most significant changes in the federal financial regulation since the regulatory reform that followed the Great Depression. (Damian & Lucchetti, 2010)

the causes that led to the 2008 crisis. They view Dodd-Frank as a comprehensive and powerful

The great recession of the year 2007-2009 had a substantial adverse impact on the US Economy and the world. Charles Ferguson documentary narrates how politicians, bankers, and economist conspired to create a crisis that caused high unemployment, increased the United States global debt and contributed to the loss of investments and savings. He describes how banks resisted regulation in the early 1990's by CFTC and how successive regimes led to the crisis by enacting laws that supported the process.

In 2008, when the financial crisis occurred, millions of Americans were left without jobs and trillions of dollars of wealth was lost wealth. To make sure the Great Recession would not happen again, President Barrack Obama put into effect the Dodd- Frank Act. With the help of this law, banks will not be able to take irresponsible risks that had negative effects on the American people. Furthermore, with the Volcker Rule embedded into the act, it will ensure that banks are no longer allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their

The Great Recession inflicted abundant harm in the U.S. and global economy; 8.7 million jobs vanished (Center on Budget), 9.3 million Americans lost their homes (Kusisto), and the U.S. GDP fell below what the economy was capable to produce (Center on Budget). The financial crisis was unforeseen by millions and few predicted that the market would enter a recession. Due to the impact that the recession had, several studies have been conducted in order to determine what caused the recession and if it could have been prevented. Government intervention played a key role in the crisis by providing the bailout money that saved those “Too Big to Fail” institutions. Due to the amount of money invested in the bailout and the damage that the financial crisis had on the U.S. population, “Too Big to Fail Banks”, and financial regulation are two of the biggest focuses of the presidential candidates. Politicians might assure voters that change will occur, but is it to late for change to be efficient, are the financial institutions making the same mistakes that led to the financial crisis?

In 2008 America’s financial system was brought to a stand still as decades of negligence and financial decisions caused our economy to sink into the worst recession since the great depression. Cultivating a problem worse than America has seen in roughly a century points one finger not at a particular cause, but a string of events that finally gave way. Now, eight years later our economy is still recovering, and time has allowed us to look back at decades of mistakes to try and connect the dots of the perfect storm that collapsed our financial market in 2008. In 2009 Brookings Institution, one of Washington’s oldest think tanks, concluded there were three causes that resulted in the crisis. Economists Martin Baily and Douglas Elliot stated that the results of government intervention in the housing market, the influences Wall Street had on Washington, and global economic forces were the three main causes of the economic collapse. They believed that a housing bubble inflated when Fannie Mae and Freddie Mac, two government-sponsored enterprises, intervened in the housing market. The banking industry was called out to be blamed for years of manipulation of our political and financial systems. Lastly, Baily and Elliot cite the global economy and the existence of a credit boom throughout European and Asian nations. Low inflation and consistent growth throughout the world economy spiked investors’ interest in acquiring riskier investments, which encouraged

The Dodd-Frank Act reestablished some of these needed measures to prevent this crisis from occurring again in the future. (Jacobson, 2013)In reviewing the differences between the Great Depression and the Great Recession, it is clear that leaders incorporated lessons from the history of the Great Depression and utilized those lessons in the recovery in the Great Recession. First of all, the Great Recession never reached the magnitude of the Great Depression due to the quick actions of policymakers and President Bush. Although there was an extensive cost to achieve overcoming both crises in America,

The collapse of Lehman Brothers, a sprawling global bank, in September 2008 almost brought down the world’s financial system. Considered by many economists to have been the worst financial crisis since the Great depression of the 1930s. Economist Peter Morici coined the term the “The Great Recession” to describe the period. While the causes are still being debated, many ramifications are clear and include the failure of major corporations, large declines in asset values (some estimates put the drop in the trillions of dollars range), substantial government intervention across the globe, and a significant decline in economic activity. Both regulatory and market based solutions have been proposed or executed to attempt to combat the causes and effects of the crisis.

The banking crisis of the late 2000s, often called the Great Recession, is labelled by many economists as the worst financial crisis since the Great Depression. Its effect on the markets around the world can still be felt. Many countries suffered a drop in GDP, small or even negative growth, bankrupting businesses and rise in unemployment. The welfare cost that society had to paid lead to an obvious question: ‘Who’s to blame?’ The fingers are pointed to the United States of America, as it is obvious that this is where the crisis began, but who exactly is responsible? Many people believe that the banks are the only ones that are guilty, but this is just not true. The crisis was really a systematic failure, in which many problems in the

One of the current topics in financial news concerns regulatory legislations and specifically the Dodd-Frank act that was enacted after the 2008 financial crisis. As with most regulatory legislations, there are both pros and cons with proponents to each side. I find the current arguments similar to the issues surrounding the Sarbanes-Oxley Act of 2002 that was enacted after many financial accounting scandals in the late 1990s. While many believe both pieces of legislations make the financial markets safer and more transparent, there needs to be a balancing act to allow capitalism to also flourish in a free economy.

The goal of financial regulation is to increase efficiency in the market, as well as enhance the market 's ability to absorb shock caused by financial instability. There are many reasons for financial instability, but it can be narrowed down to