Case 2
Assignment 2: Capital Investment Decisions
Heather Plum
Professor Jacquelyn Mosely
ACC 599 – Graduate Accounting Capstone
April 27, 2012
Strayer University
Introduction
Dodd-Frank act, named after its founder, the Democratic senators Chris Dodd and Barney Frank, designed to form a new Financial Stability Oversight Council, or better call it an authority on non performing banks and financial institutions, enforces very stringent capital, leverage and liquidity requirements. The Act holds new necessities for private equity funds, credit rating agencies, debit card interchange fees, derivatives, hedge funds, and corporate governance, to which we believe, will certainly pull down the ability to churn out better profit levels of US banks (Brush, 2012) .
What’s more, with this act we believe that the indications are on concluding the 50 years old financial deregulation, which was supposed to be the best for the US economy. If the critics have to be believed, then this act has little to do in order to save the next crisis as this only stresses on “too big to fail”, and has indeed failed to take into account the reform of America 's mal-performing secondary mortgage players Freddie Mac and Fannie Mae, and has also failed to re-establish Glass-Steagall’s separation of “utility” and “casino” banking. In totality this indicates that, this act will prove more destructive that constructive as it doesn’t lay emphasis on the future financial crises and rather seems to obstruct the economic growth (Brush, 2012) .
Discuss how the changes in the lending regulatory environment, particularly with the passage of the Dodd-Frank Act, has impacted the bank’s ability to lend money to businesses for capital projects and acquisitions. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, enacted by the Obama administration in the United States, is perhaps the most ambitious and far-reaching overhaul of financial
Heather Plum
Professor Jacquelyn Mosely
ACC 599 – Graduate Accounting Capstone
April 27, 2012
Strayer University
Introduction
Dodd-Frank act, named after its founder, the Democratic senators Chris Dodd and Barney Frank, designed to form a new Financial Stability Oversight Council, or better call it an authority on non performing banks and financial institutions, enforces very stringent capital, leverage and liquidity requirements. The Act holds new necessities for private equity funds, credit rating agencies, debit card interchange fees, derivatives, hedge funds, and corporate governance, to which we believe, will certainly pull down the ability to churn out better profit levels of US banks (Brush, 2012) .
What’s more, with this act we believe that the indications are on concluding the 50 years old financial deregulation, which was supposed to be the best for the US economy. If the critics have to be believed, then this act has little to do in order to save the next crisis as this only stresses on “too big to fail”, and has indeed failed to take into account the reform of America 's mal-performing secondary mortgage players Freddie Mac and Fannie Mae, and has also failed to re-establish Glass-Steagall’s separation of “utility” and “casino” banking. In totality this indicates that, this act will prove more destructive that constructive as it doesn’t lay emphasis on the future financial crises and rather seems to obstruct the economic growth (Brush, 2012) .
Discuss how the changes in the lending regulatory environment, particularly with the passage of the Dodd-Frank Act, has impacted the bank’s ability to lend money to businesses for capital projects and acquisitions. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, enacted by the Obama administration in the United States, is perhaps the most ambitious and far-reaching overhaul of financial
References: Brush, S. (n.d.). Dodd-frank. Retrieved from www.bloomberg.com Mankiw, N. G. (2012). Mankiw’s ten principles. , SOUTH-WESTERN. Retrieved from http://www.swlearning.com/economics/mankiw/principles2e/principles.html. SEC, (2012). Dodd-Frank. Retrieved from website: www. Sec.gov