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Dodd Frank Act Of 2008 Essay

1062 Words5 Pages

The 2008 market crash effects. More than two trillion dollars were lost in global economic growth during the 2008 financial crash. In December 2007, the economy of the United States entered a recession which led many financial businesses to fail and bankruptcy, and investors to back out of deals. This recession was caused by the collapse of the housing market, which had set a new record and had a hold of 600 billion dollars in subprime loans. Further, as if only to shake the already barely surviving economy, one of the if not the biggest investment banks in the whole world, known as the Lehman Brothers. Sending the population and investors into a crisis, trying to get their money out of the bank as quickly as possible. With the Lehman Brothers …show more content…

New rules and regulations -. After the recession had finally calmed down, there was one thing in everybody's mind, there was a need for reform in the financial sector, its supervision, and its rules and regulations. And so new rules and regulations were created in the form of an act, the Dodd-Frank Act of 2010. The Dodd-Frank Act of 2010 according to the Federal Government History in the article The Great Recession and Its Aftermath “created new provisions for the treatment of large financial institutions”, for example, the Orderly Liquidation Authority also known as the OLA, which allows the FDIC to end or close organizations who are expected to fail and greatly risk the financial system. In summary, the proposed and passed by ex-president Obama Dodd-Frank Act of 2010 purpose is to provide basic. common-sense protection for American families, create a “consumer watchdog” to watch, prevent companies and lenders from exploiting consumers, and most importantly prevent excessive risk-taking which has led to the financial crash that has occurred in the past (National Archives, Dodd-Frank). While some companies and lenders were fighting against the financial reform, many regarded the act as “a huge step forward” and a great way to reform and fix the financial systems and sector (McCoy, Kevin 2008 financial

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