Dodd & Frank Weigh in on Outcomes of Financial Reform
This week marks the Dodd-Frank Wall Street Reform and Consumer Protection Act’s (Dodd-Frank Act) fifth anniversary. With Washington insiders, interest groups and think tanks weighing in on the successes and failures of the landmark financial reform, the Wall Street Journal sat down with the law’s authors, former Senator Christopher Dodd (D – CT) and former Representative Barney Frank (D – MA), to get their take.
Of the accomplishments cited by the two former Congressmen, the Financial Stability Oversight Council (FSOC) and more prudent mortgage underwriting standards topped the list. Both Congressmen also agreed that the Dodd-Frank Act had made the financial system safer and that the “too big to fail” risk had been largely eliminated. Frank commented on an increasingly controversial issue when asked “Have any of the rules turned out differently than you think Congress intended?” Frank responded, “I do not think straightforward insurance companies or money managers should be covered [and regulated as SIFIs, systemically important financial institutions].” Conversely, Frank felt that regulators had not acted with enough authority in drafting the Risk Retention/Qualified Residential Mortgage (QRM) rules, saying “The one major weakness that I’ve seen in the implementation was this decision by the regulators not to impose risk retention on all residential mortgages.”
- Wall Street Journal Interview: http://www.wsj.com/articles/dodd-frank-creators-on-wall-street-reform-five-years-later-1437347191