Dodd-Frank Positive Legislation

Question 1: Dodd-Frank

The Dodd- Frank refers to a very sensitive legislation that was passed in 2010 meant to address the financial crisis that hit the United States in 2008. This legislation was supposed to strengthen the economy through the elimination of risks that had made entry into the USA financial system. With this policy, various institutions were mandated to ensure they foresee the whole plan. The Orderly Liquidation and the financial stability council should do this monitoring at periodic intervals. Companies that are considered to be too big to fail are the ones commonly assessed; this is because if they failed this could affect the economy of the country immensely. This legislation also monitors the large banks that could be threat

This is a commission that has been created by the Congress for the purpose of ensuring proper regulation of the securities. This commission is also meant to protect the investors by offering them useful information before they make entry into the market. In addition to this, the commission also ensures monitoring of the corporate takeovers within the United States. The 5 members of this commission are appointees of the president in, which the Senate discusses and analyzes the names before approval of the appointees. They are meant to address the issues that touch on activities such as fraud that may be a threat to the United States of America economy. The jurisdiction of SEC is only within the United States since the government has appointed them. They deal with financial institutions and firms that can be deemed as threat to the economy of the United States. They are supposed to implement all the securities laws as provided by the federal government, make recommendations and control securities in the stock

Most notably the CEO CFO, Faulkner, who insists that these rules are uncalled for. According to him, the pay for performance regulation needs to be amended. He argues that despite him being the overall leader, the underlying employees may be behind the failure; this should not be made a one man problem. He has also termed the exercise wastage of time; this is due to the too many hours that he has to take to compile all the data amounting to almost 16 hours. Others have argued that the rule that requires the CEOs to be weighed based on TSR is not fit. This is because it’s subject to alteration as someone can cut costs for a short period to have him justified. The two arguments are justified given they do not fully address some aspects. As a result, there is the need for amendments to these rules