It’s Regulators Versus the Market in This House Debate
The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law by President Barack Obama three years ago. Introduced by former House Financial Services Committee Chair Rep. Barney Frank (D-Mass.) and former Senate Banking Committee Chairman Sen. Chris Dodd (D-Conn.), the Dodd-Frank Act set in motion the largest financial overhaul since the Great Depression.
To a bridge a long story packed with all the highly engaging political drama that only financial regulation could deliver, the implementation of Dodd-Frank has been contentious. Dallas Federal Reserve Bank President Richard Fisher perhaps best captured the situation in June, when he served as a witness during a hearing of the House Committee of Financial Services.
The Dodd-Frank Act is “an earnest attempt to address much needed reform in the financial services industry,” he said, but “its stated promise to end too big to fail rings hollow. Running 849 pages and with more than 9,000 pages of regulations written so far to implement it, Dodd-Frank is long on process and complexity but short on results … Regulators cannot enforce rules that are not easily understood. Nor can they enforce these rules without creating armies of new supervisors.”