DODD FRANK ACT
THE IMPACT OF THE DODD-FRANK ACT
ABSTRACT
The economic crisis we have endured for the past few years has been compared to the Great Depression; a downward spiral that seem inevitable and consumed anyone in its path. It seemed like every major company needed financial assistance; bailouts, after bailouts seemed almost never-ending. Then came the Dodd-Frank Act, a proposal that was made to avoid such an epidemic from ever reoccurring again. The Dodd-Frank Act presented rules and regulations that financial industries must abide by, and in the grand scheme of things, its assumed to protect taxpayers/consumers. There are many arguments against the Dodd-Frank Act, disputes that accuses the act of causing the consumers to pay its consequences in the long run.. This paper will explain the Dodd-Frank Act’s impact on the economy, consumers, credit and the industry.
INTRODUCTION
The Dodd-Frank Wall Street Reform Act is a comprehensive reform sought to regulate the financial markets and prevent economic crisis. The act imposes a variety of new requirements regarding the business activities, capital, liquidity, governance and risk-management practices of large banking and financial service industries, to make the system safer (www.fsround.org). Within the next few years there will be new rules and regulations enforced by existing and new oversight authorities, which will create an unavoidable governance environment upon the banking and financial industry. The main purpose of this act is to avoid a repeat of the of the financial crisis in 2008 by promoting “the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘too big fail’, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes” (http://useconomy.about.com).
IMPACT ON THE ECONOMY
The act created a council of regulators who monitor and manage systemic risk. “The
ABSTRACT
The economic crisis we have endured for the past few years has been compared to the Great Depression; a downward spiral that seem inevitable and consumed anyone in its path. It seemed like every major company needed financial assistance; bailouts, after bailouts seemed almost never-ending. Then came the Dodd-Frank Act, a proposal that was made to avoid such an epidemic from ever reoccurring again. The Dodd-Frank Act presented rules and regulations that financial industries must abide by, and in the grand scheme of things, its assumed to protect taxpayers/consumers. There are many arguments against the Dodd-Frank Act, disputes that accuses the act of causing the consumers to pay its consequences in the long run.. This paper will explain the Dodd-Frank Act’s impact on the economy, consumers, credit and the industry.
INTRODUCTION
The Dodd-Frank Wall Street Reform Act is a comprehensive reform sought to regulate the financial markets and prevent economic crisis. The act imposes a variety of new requirements regarding the business activities, capital, liquidity, governance and risk-management practices of large banking and financial service industries, to make the system safer (www.fsround.org). Within the next few years there will be new rules and regulations enforced by existing and new oversight authorities, which will create an unavoidable governance environment upon the banking and financial industry. The main purpose of this act is to avoid a repeat of the of the financial crisis in 2008 by promoting “the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘too big fail’, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes” (http://useconomy.about.com).
IMPACT ON THE ECONOMY
The act created a council of regulators who monitor and manage systemic risk. “The