The Dodd-Frank Act and Wall Street Reform Essay

On October 29, 1929, the stock market crashed. Not only did millions of investors lose their money but banks lost all of the money they had invested that their customers had given to them. To make the problem worse is that the people who had remaining money in the banks tried

On June 16, 1933, President Roosevelt signed into law the widely debated Glass-Steagall Banking Act. Sponsored by Virginia’s U.S. Senator Carter Glass and Alabama’s U.S. Representative Henry Steagall, the Glass-Steagall Banking Act was one of the attempts to restore the American people’s confidence in the banking system. Congress knew the current banking system needed reform. They desired to restrict the use of bank credit for speculation and instead direct bank credit to more productive uses, such as agriculture, commerce, and industry.

The emergency banking act legalized Roosevelts, it also addressed the evaluation and reorganization of the closed banks permitting the appointment of a consevator with the powers of reciervership overall nations allowing for the orderly liquidation of banks that could not be saved and the reorganization of those that could. An independent agency of the U.S government, to provide investments in curupt banks, by purchasing the stock of banks to relieve them of short term debts to provide them with a long term investment fund. The act also allowed new federal researve bank notes to be issued to the current address of the currency shortage that was due to people hoording thier money at home. Two million dollers to people that were effected by The emergency banking relief act. The banks reopened on march 13, 1933, The day after Franklin Roosevelts radio speech and bank deposits for outweighed the bank withdrawals. The 1933 Emergency Banking relief act was largely replaced later by the Banking Act of 1933.

The Glass-Steagall Act effectively built a Chinese wall between commercial and investment banking wherein the commercial banks were not allowed to trade securities or take part in the insurance business. It also prohibited the commercial banks from payment of interest on demand deposits and from engaging in inter-state operations. The act implemented Regulation Q which put ceilings on the interest rates the banks could pay on their time deposits say savings deposits. Regulation Q prevented the competitive interest rate wars that didn’t allow rates to reach unreasonably high levels. If rates had not been regulated then the banks would have been forced to lend at higher rates to remain profitable which would have led to riskier investments by them and failure problems would have followed. Looking at the evidence we see that from 1930 to 1933 more than 9000 commercial banks failed whereas, from 1934 to 1973 only 641 U.S banks were closed.[1] The act

After the tragic Stock Market Crash of 1933, America had plunged into a deep depression. Over 9,000 banks nationwide were closing their doors. After the Stock Market Crash, President Herbert Hoover was in office working ceaselessly to fix what was left of the economy. However, his effort did not seem to be enough. In the election of 1933, Franklin D. Roosevelt won by a landslide. Roosevelt stated, “This nation asks for action and action now,” and he did just that.(Barbour, 82) He saved countless families from poverty that was spreading like wildfire across the U.S. Federal Deposit Insurance Corporation (FDIC) is a portion of the New Deal formulated by Franklin D. Roosevelt to help save America from poverty caused by bank failures. “Roosevelt’s New Deal preserved the American democratic capitalist system.” (Schlesinger 137)

This caused millions of americans to lose their life's savings as well as build up a distrust of bank in the future. The New Deal established the emergency Banking bill which closed down banks for a while to give them some time to recover. In addition to the banking bill the FDIC( Federal Deposit insurance Corporation) insured banks for up to 5000 dollars this greatly benefited both the banks and the people since it added a safety net for the bank which by association helps the Americans who use them because they are less likely to fail. This improved the low morale of the people during the

The Emergency Banking Act Of 1933 was a bill that was passed by President Franklin D. Roosevelt in response to the money-wise conditions of the Great Depression. The act was passed when banks were shutdown, in hopes that Americans would restart their self-assurance by the time the banks were capable of re-opening.

Before the advent of the Federal Deposit Insurance Corporation (FDIC) in 1933 and the general conception of government safety nets, the United States banking industry was quite different than it is today. Depositors assumed substantial default risk and even the slightest changes in consumer confidence could result in complete turmoil within the banking world. In addition, bank managers had almost complete discretion over operations. However, today the financial system is among the most heavily government- regulated sectors of the U.S. economy. This drastic change in public policy resulted directly from the industry’s numerous pre-regulatory failures and major disruptions that produced severe economic and social

The banking industry as a whole after the stock market crashed was going bankrupt due to not being able to carry the “bad debt” that was created from using customer money to buy stock. Because the banks were out of money, they were unable to cover customer withdrawals from their bank, causing many bank customers to lose all of their savings. With the uncertainty of the future of the banking industry, many people withdrew all of their savings, which caused more than 9,000 banks to close their doors and go out of business (Kelly). Due to the effects of the Great Depression, and the collapse of the banking industry, the government created regulations to prevent similar failure in the future. For Example, the SEC, (or Securities Exchange Commission), which regulates the sell and trade of stocks, bonds and other investments was created as a result of The Great Depression. The FDIC (or Federal Deposit Insurance Corporation), was created to insure bank accounts so that that the consumer would be protected if the bank were to go out of business (Kelly). The Great Depression's effect on the banking industry led to many useful changes to the banking industry and helped restore confidence in banks in the American people.

Yes we need to have some form of regulation. The proposed regulation is not bad as it covers most of the recommendations discussed in this write up earlier. It reinforces the regulatory role as outlined earlier and requires improving the capital requirements as well as the risk management systems in place in financial institutions. At the same time the focus is mostly on large, complex financial institutions that have a systematic impact so it allows some flexibility particularly for smaller and medium size financial institutions.

The National Bank act of 1863 was definitely an improvement to the nation’s banking system but it was not successful as it was thought of to be, it did not fix the financial problems of the Nation at the time It drove approximately 1500 state chartered banks out of business and some was forced to become national charter banks because they were losing profits with the 10 percent tax increase that was imposed on the issuing of their banknotes. The state chartered banks that staid in business turned to the use of checking accounts and as a result, they became more successful and outgrew the nationally chartered banks. For this reason, I do personally thinks that the National banks acts was a failure.

This bill has done many things for the united states and has given American consumers the confidence needed in order to trust their hard earned money in the hands of agencies and corporations. As discussed there are many pros for the American people. An obscene amount of corporations and small business have taken hits and lost large profits during the six year tenure of this bill, as well. Many believe that this bill has done great things to put trust and honesty back into our nation, while others argue that it has failed and needs to be abolished. It is uncertain whether or not the initiative will make it to see it’s seventh birthday, with revisions from the financial choice act or if the bill will be replaced all together. Either way we

It was introduced on March 15, 2010 and approved by the House on June 30, with President Obama signing this Act into law on July 21 2010 (Dodd-Frank Wall Street Reform Act, 2015). This Act regulates credit cards, loans and mortgages, as well as to make hedge funds trades public information. In addition, this Act watches over agencies that are involved with consumer credit ratings and supervises insurance companies in addition to reforming the Federal Reserve. One aspect of this bill would prevent the Fed from making an emergency loan to a single entity, like Bear Stearns or AIG, without Treasury Department approval (Dodd-Frank Wall Street Reform Act, 2015). This act was supported by Sen. Scott Brown of Massachusetts, Sen. Susan Collins and fellow Maine Sen. Olympia Snowe (Patten, 2010). In addition, there were other government officials and managers of established financial institutions who supported this bill. However, there are always those who are opposed to the Dodd – Frank bill including some Republican and Democratic leaders and several corporate CEOs and entrepreneurs in the financial market who value freedom were opposed to these limitations. The reasons they were against this bill was that they thought the bill will ultimately fail to prevent another collapse, as well as they feel that this bill will essentially lessen the readiness of some banks to

The regulatory reform process is currently moving from policymaking to the implementation phase. The implications of regulatory reform for banks has never been greater, and the ability to navigate the new environment will require strong processes that integrate regulatory compliance and changes to the business model. Planning has never been more important as reaction to each regulation could be very costly.

On 20 May this year the Amendment to the Banks Act regulations ("Regulations") in terms of section 90 of the Banks Act, 1990 ("Banks Act") were published in the government gazette and will come into effect on 1 July 2016. A number of cosmetic changes have been made to the Regulations but a few material changes will be highlighted in this alert.