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Wall Street regulation

Posted by admin on October 10, 2017 in Banks, Finance with No Comments


The Dodd-Frank Wall Street Reform passed by the Obama administration in 2010 became a critical step in addressing the world crisis. It totally rejected the pre-existing deregulation of the financial sector that let banks accomplish risky deals. The act restricted the capitalization of banks, reinforced mortgage requirements, and curbed the excessive risk-taking of the banks. Though the legislation automatically restrained the growth of the financial sector, it intended to cope with the consequences of the crisis of 2008.
The Dodd-Frank act is strongly criticized in Washington. The ability of financial institutions to make money decreases due to the numerous positions of the document. The competitiveness of the American companies in the international market falls because of the governmental regulation. The lack of liquidity may damage the bond market which lacks a constant supply of buyers and sellers. Critics believe that over the time the act would drag high unemployment together with low wages and living standards. Besides, the act involves a dozen of newly-created federal agencies to oversee its 225 provisions enforced.
Looking at the excessive regulation of the financial sector, policymakers attempt to repel it the Dodd-Frank act. But currently, the legislation can only be amended. The act impacted international banking agreements so that it is impossible to reverse it so far. Anyway, American banks will not face any dramatic changes in the near time even if some positions of the act are changed soon.

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