The Dodd-Frank Act
Its an oftenly stated human cliché to never feel “Too Big for ones own boots.” However cliches only seem to gain there momentum in the wake of a crisis. A company at its prime which could not have dared to be looked at with disdaining eyes had finally crumbled. The Lehman brothers resilience has to credited towards the strive that was taken to open operations on a daily basis in the mast of a world financial criss in 2008, however whether that can be attributed towards a wholehearted desire to keep the company afloat or the sheer power of human greed is a debate left for another occasion.
The Dodd-Frank Act was Signed into law by President Barack Obama on July 21 2010. The act served to imbibe through its provisions a nexus of revolutionary …show more content…
change in relation to governance of cooperation's, their stability and future prevention of the big boot syndrome.
The three central pillars of the act revolve around a systematic management of risk, establishment of stricter regulatory authorities and taking no reputation no matter how resplendent it is for granted.
The titles under the act cover a variety of avenues, some of which that stand out are: financial stability, orderly liquidation authority, Transfer of Powers to the Comptroller/ the FDIC/ and the FED, Regulation of Advisers to Hedge Funds and Others, Wall Street Transparency and Accountability, Bureau of Consumer Financial Protection and the Pay It Back Act.
Financial stability was the imperative building block from where Dodd-Frank arose. The basis of stability is self-sufficiency where companies can no longer be reliant upon the government as a scape goat measure.
orderly liquidation authority is responsible for enlightening the government and the public of the defaults which have been undertaken by a company under possible receivership. An orderly liquidation fund is to be set up for unforeseen circumstances relating to the financial liquidation of a company.
Transfer of Powers to the Comptroller, the FDIC and the FED involved eradicating the Office of Thrift Supervision and handing over its roles and responsibilities to the Federal …show more content…
Reserve
Regulation of Advisers to Hedge Funds is extremely integral as it serves as a base for monitoring and control. In a generic sense it prevents an artificial cloud hovering over consumer perturbation and as a resultant it would result in less abrupt panic from the investors. Investment advisors must proved a crystal clear slate before any form of information can be transposed upon the general public.
Wall Street Transparency and Accountability centrally revolves around the regulation of the counter swap market.
The Bureau of Consumer Financial Protection Consists mainly of 5 sets of protocol:Research, Community Affairs, Complaint Tracking and Collection, The Office of Fair Lending and Equal Opportunity (whose role is to ensure equitable access to credit) and The Office of Financial Literacy (Who engage themselves in promoting financial literacy among consumers).
Finally the pay it back act serves as a mitigating measure for refurbishment of the financial system of the country as a totality, the reserves of which cannot be used for the itching palms of a few.
Such colossal events always lead us to the proposed “what if “scenario in the next section I would like to reflect on a proposed implementation of a provision in the Dodd-Frank act which could have prevented the mammoth pandaemonium which spread on a global scale as a resultant of the fall of Lehman Brothers.
Under the orderly liquidation authority of Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act had that law been in place in advance of Lehman’s failure and in light of the powers provided to the FDIC under the Dodd-Frank Act to act decisively to preserve asset value and structure a transaction to sell Lehman’s valuable operations to interested buyers which are drawn from those long used by the FDIC in resolving failing banks could have promoted systemic stability and made the shareholders and creditors, not taxpayers, bear the
losses
The disorderly and costly manner of the bankruptcy contributed to the massive financial disruption of late 2008. The elongated bankruptcy proceeding has allocated resources elsewhere that could have otherwise been used to pay creditors. Through February 2011, more than $1.2 billion in fees have been charged by attorneys and other professionals representing the debtors alone.
Title II of the Dodd-Frank Act could have been implemented to resolve Lehman by effectuating a rapid, orderly and transparent sale of the company’s assets. This sale would have been completed through a competitive bidding process and likely would have incorporated either loss-sharing to encourage higher bids or a form of good firm-bad firm structure in which some troubled assets would be left in the receivership for later disposition.
The Lehman Brothers criss occurs at the point of nexus where the world wishes to move forward with revolutionary change. Governing institutions around the world wish to imbibe fairness, transparency, accountability and independence amongst their corporations. The Dodd Frank act serves as a stepping stone towards the far and beyond whether it manages to achieve its self-seated goals will unfold in front of us in the conterminous future.
The Dodd-Frank Act was Signed into law by President Barack Obama on July 21 2010. The act served to imbibe through its provisions a nexus of revolutionary …show more content…
change in relation to governance of cooperation's, their stability and future prevention of the big boot syndrome.
The three central pillars of the act revolve around a systematic management of risk, establishment of stricter regulatory authorities and taking no reputation no matter how resplendent it is for granted.
The titles under the act cover a variety of avenues, some of which that stand out are: financial stability, orderly liquidation authority, Transfer of Powers to the Comptroller/ the FDIC/ and the FED, Regulation of Advisers to Hedge Funds and Others, Wall Street Transparency and Accountability, Bureau of Consumer Financial Protection and the Pay It Back Act.
Financial stability was the imperative building block from where Dodd-Frank arose. The basis of stability is self-sufficiency where companies can no longer be reliant upon the government as a scape goat measure.
orderly liquidation authority is responsible for enlightening the government and the public of the defaults which have been undertaken by a company under possible receivership. An orderly liquidation fund is to be set up for unforeseen circumstances relating to the financial liquidation of a company.
Transfer of Powers to the Comptroller, the FDIC and the FED involved eradicating the Office of Thrift Supervision and handing over its roles and responsibilities to the Federal …show more content…
Reserve
Regulation of Advisers to Hedge Funds is extremely integral as it serves as a base for monitoring and control. In a generic sense it prevents an artificial cloud hovering over consumer perturbation and as a resultant it would result in less abrupt panic from the investors. Investment advisors must proved a crystal clear slate before any form of information can be transposed upon the general public.
Wall Street Transparency and Accountability centrally revolves around the regulation of the counter swap market.
The Bureau of Consumer Financial Protection Consists mainly of 5 sets of protocol:Research, Community Affairs, Complaint Tracking and Collection, The Office of Fair Lending and Equal Opportunity (whose role is to ensure equitable access to credit) and The Office of Financial Literacy (Who engage themselves in promoting financial literacy among consumers).
Finally the pay it back act serves as a mitigating measure for refurbishment of the financial system of the country as a totality, the reserves of which cannot be used for the itching palms of a few.
Such colossal events always lead us to the proposed “what if “scenario in the next section I would like to reflect on a proposed implementation of a provision in the Dodd-Frank act which could have prevented the mammoth pandaemonium which spread on a global scale as a resultant of the fall of Lehman Brothers.
Under the orderly liquidation authority of Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act had that law been in place in advance of Lehman’s failure and in light of the powers provided to the FDIC under the Dodd-Frank Act to act decisively to preserve asset value and structure a transaction to sell Lehman’s valuable operations to interested buyers which are drawn from those long used by the FDIC in resolving failing banks could have promoted systemic stability and made the shareholders and creditors, not taxpayers, bear the
losses
The disorderly and costly manner of the bankruptcy contributed to the massive financial disruption of late 2008. The elongated bankruptcy proceeding has allocated resources elsewhere that could have otherwise been used to pay creditors. Through February 2011, more than $1.2 billion in fees have been charged by attorneys and other professionals representing the debtors alone.
Title II of the Dodd-Frank Act could have been implemented to resolve Lehman by effectuating a rapid, orderly and transparent sale of the company’s assets. This sale would have been completed through a competitive bidding process and likely would have incorporated either loss-sharing to encourage higher bids or a form of good firm-bad firm structure in which some troubled assets would be left in the receivership for later disposition.
The Lehman Brothers criss occurs at the point of nexus where the world wishes to move forward with revolutionary change. Governing institutions around the world wish to imbibe fairness, transparency, accountability and independence amongst their corporations. The Dodd Frank act serves as a stepping stone towards the far and beyond whether it manages to achieve its self-seated goals will unfold in front of us in the conterminous future.