The Dodd-Frank Act Summary

The Glass-Steagall Act prohibits commercial banks from engaging in investment business. It gave tighter regulation of national banks to the Federal Reserve System; prohibited bank sales of securities; and created the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits with a pool of money appropriated from banks. The expansion of commercial banks into securities underwriting played a huge part in bringing on the Great Depression. The Glass-Steagall Act restored public confidence in banking practices during the Great Depression (Sorkin). The Dodd-Frank Act was written to regulate the swaps marketplace. The Dodd-Frank Wall Street Reform and Consumer Protection Act required the CFTC to conduct a number of studies and reports

It was the first law of its kind: to introduce regulation into the swaps marketplace. Instead of trading out of sight of the public, standardized derivatives will be required to be traded on regulated exchanges or swap execution facilities. Transparent trading of swaps will increase competition and bring better pricing to the marketplace. This will lower costs for businesses and consumers. Swap dealers will be subject to capital and margin requirements to lower risk in the system. Dealers will be required to meet robust business conduct standards to lower risk and promote market integrity. Dealers will be required to meet recordkeeping and reporting requirements so that regulators can police the markets (“Dodd-Frank Act”). I personally think the Glass-Steagall Act sounds like it was more effective than the Dodd-Frank Act. Of course, there are highs and lows in the market, but to my understanding, there was not a major depression in the market the entire time the act was in place. The Glass-Steagall Act was also enacted in response to the Great Depression, so it appears as if it has a more understanding and encompassing way of regulating the market in a way

He believes that “too-big-to-fail” banks are too big and too risky. After watching the Inside Job documentary, I can understand why he would feel this way. He also voices concerns about corrupting of the banking industry and the threat it poses to democracy. While in a way I feel this is an overstatement, I can still see why he would feel this way. If a monopolized bank failed, it could be devastating (Eskow). In an interesting turn, the Trump administration is also trying to change the way regulation is used. All that has truly been defined is that he is proposing new core principles for regulation, and I think that is a step in the right direction. Supporters of the rule describe it as a basic consumer protection to prevent brokers from taking advantage of vulnerable clients. Overall though, the administration has put forth that they are trying to loosen current regulation legislation, which is an area of concern (Protess). In that way, he makes it sound like this is all a good idea, but articles are ridden with concerns and counterpoints about this issue. I cannot say I feel like deregulation is the way to