Summary Of Dodd Frank Wall Street Reform

The last couple of years proved devastating to the Financial Markets with the United States being the center of it all. In the fall of 2008, once valued securities lost most or nearly all it’s value, the stock market plunged, real estate market suffered an unprecedented demise, the debt market froze and many high flying financial firms went under. The blame list included high-risk real estate lending by some of America’s leading banks, regulatory failures and loopholes of the regulatory board tasked to protect investors, inflated credit ratings by the leading credit reporting agencies in the industry and abuses by the once celebrated investment bankers, who, in the years leading up to the financial crisis designed and promoted complex financial instruments; the most popular of which are credit derivatives that were purported to be the heart of the crisis. The financial collapse prompted a call for reform not only within the United States but also in the global arena. The regulatory agencies were quick to react to overhaul the flawed regulatory framework with the passage of Dodd Frank Wall Street Reform Act (Dodd Frank) in the United States, and Basel III by the Bank for International Settlement (BIS). This paper will highlight some of the regulatory changes brought forth by Dodd Frank as well as the Basel Accord through a

It charges 11 federal agencies with promulgating new regulations on various financial regulation issues. Its goal is “to provide for financial regulatory reform, to protect consumers and investors, to enhance Federal understanding of insurance issues, to regulate the over-the-counter derivatives markets, and for other purposes” (Open Congress, 2011). It brought sweeping changes to the once loose regulatory framework that previously governed credit derivatives