Dodd-Frank, Doing Justice

Following the financial crisis of 2008, the United States government decided to take legislative action in order to protect the American public and tighten the leash on the financial sector.  From unregulated derivatives markets to excessively risky trading and speculative losses written off under the cover of a portfolio hedge, the tools and investment vehicles utilized by the finance industry generated enormous amounts of revenue, however as the crisis showed, even financial powerhouses are susceptible to failure.  Bailing out the finance industry with billions of dollars provided a quick fix for keeping major firms afloat with the taxpayer money, but it was clear that real change was necessary.  The Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted with the intent “to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.”  I intend to analyze whether sufficient transparency exists in even the convoluted corners of the financial industry, with collateralized debt obligations and credit default swaps entering a market with registered dealers and regulations, in order to provide a clear view of derivative markets for consumers and regulators.  Additionally, I am interested in the impact the Volcker Rule will have, as its recent passage slowly ushers in a new era for the finance industry dictated risk aversion, consumer protection, and economic stability.  The Dodd-Frank Wall Street Reform and Consumer Protection Act is one of the most significant financial reforms in our history and can help bring sustainable economic growth in the long term, while helping protect against a future financial crisis.