The Dodd Frank Act
What the Dodd Frank Act Is
The Dodd-Frank Wall Street Reform, better known as the financial bill, was signed by President Obama on July 21, 2010. The Act was basically passed to possibly prevent another 2008 financial crisis from occurring. It provides significant changes to the structure of federal financial regulation and new requirements that apply to market assistants. Due to this there are many acquisitions that can occur. The Act has made a huge changes in our financial system. For example, bringing together all the agencies and trying to identify any risks that may be rising in our financial system. However, one main problem that happened before the recent crisis was there wasn’t any one in charge who specifically looked at the system as a whole. Since then, regulators have been trying to identify risks that might be rising as the economy changes and the financial system changes going forward. But passing the law is only the first step; it far from being whole. The regulators have to implement these laws which mean they must arrange important rules and regulations that will make financial firms solid. The act regulates many different kinds of risks, but does not control the overall demand for risk between financial institutions or deal with advantages and issues.
After the huge financial crisis, we needed a change and needed something that was going to work fast, be extremely efficient and help our economy get back on the right path. The Dodd Frank Act has been very beneficial and will hopefully continue to keep improving throughout the next couple of years to get our economy the way it used to be. If we experience another horrible crisis it will be devastating, but if we have the right tools and a good head on our shoulders we might just be able to push through it smoothly. What the Dodd Frank Act does
So what does the Dodd Frank Act actually do? A majority of people believe that the results of this Act have reflected positively on the financial industry, but there are others who have disagreed. The Act has brought the most compelling changes to the financial institution in the United States since the regulatory reform that developed after the Great Depression. It represented a massive change in the American financial regulatory environment and, due to this change; it has affected all Federal financial regulatory agencies and a decent amount of aspect of the nation's financial services corporation. Many believe that it is much too early to pass judgments on the Dodd Frank Act, but there have been financial scholars who have been known to criticize the act. They argued that the revision was inadequate to prevent another financial crisis. They also questioned if the reforms had indeed gone too far and would restrict banks and other financial establishments to make loans. As a result, there have been a lot of major banks who have lobbied, or attempted to influence decisions of Congress to approve exceptions to trading derivatives. Financial institutions have spent more than $150 million on lobbying for the second year in a row in 2011. Since then, their focus shifted from Congress to the regulators themselves. This Act seems to be extending the economic slowdown. The recent financial crisis was terrible and devastating for many people and the economy. This crisis had led banks to stop lending to each other, severely hurt the credit market, and our biggest financial institutions almost collapse. If the Dodd Frank Act had been proposed at that time, maybe some of the damage would not have been as awful. Instead, the crisis led to a recession and millions of Americans were out of their jobs and also forced smaller businesses to close down. The Dodd Frank Act is strictly aimed at the largest firms. These larger firms were the ones that were most responsible for the crisis because they present the most risk. Small banks were more so the victims of the financial crisis and hundreds of...
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