Dodd-Frank Act Summary

Words: 1611
Pages: 7
Open Document
Following the financial crisis of 2008, which was due in part to low regulation and high reliance on large banks, it was necessary to subject banks to more stringent regulation. Consequently, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act was enacted July 2010 “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” (Dodd-Frank Wall Street Reform and Consumer Protection Act). The Dodd-Frank Act is a financial reform legislation that was established to create financial …show more content…
The Federal Reserve addressed the issue of such risk-based practices through setting new capital and liquidity requirements. The standards for the capital that depository institutions must retain to protect against their exposures was adjusted through the new requirements. The expectation was that banks could remain stable significantly longer, without becoming dependent on the radical government bailouts, in the case that this occurs …show more content…
However, the Volcker Rule was not initially included in President Barack Obama's original June 2009 proposal, it was later in January 2010 that Obama proposed the rule, after the House bill had passed. Due actions such as proprietary trading activities, commercial banks faced losses that placed depositors’ fund, and in turn taxpayers’ money, at risk. To counteract this the government enacted the Volcker Rule, which’s purpose was to regulate proprietary trading activity, in turn preventing losses that placed taxpayers’ money, at risk. Similar to the Glass-Steagall Act of 1933, which was partially repealed in 1999, which established a divide between commercial banking and investment banking. The Volcker Rule places restraints on banks’ ability to invest in hedge and private equity
Show More

Related Documents: Dodd-Frank Act Summary

Essay on Visa: Credit Card and Visa

Visa Strategy Report Brian Shain Angel Rojo Nick Gentili April 19, 2013 Contents Executive Summary .................................................................................................................. 3 Company Background .............................................................................................................. 4 Financial Analysis .................................................................................................................... 6 Liquidity &…

Words 6729 - Pages 27

Lobster Case

16. Economy- Apple’s first diversity report shows by Brian Fung. Summary Apple release their first diversity report. The report says that white employees and men was 55 percent of Apple workforce. The report says that only 15 percent of Apple employees are Asian which is smaller than Google and Yahoo. Blacks and Hispanics takes about 18 percent of Apple employees. Although the report have low numbers, Tim Cook says that Apple has a long way to go. 17. Sports- Steve Ballmer closed the deal on his…

Words 1859 - Pages 8

Vulnerables in the Securities Essay examples

vulnerable to the capital, information acquisition, securities knowledge and the effect of psychological biases (Kaniel, Ron, Gideon, & Sheridan, 2008). However, a vulnerable investor may not be vulnerable to all of the above four aspects. In summary, vulnerable investors are vulnerable to main three aspects: asymmetric information, lack of capital and lack of securities knowledge. 2.1.1 Asymmetric information Vulnerable investors are poor predictors of future stock returns because of limited…

Words 2816 - Pages 12

Gearing Up For Basel III Essays

reporting and risk management requirements will compel banks to significantly overhaul their IT infrastructure to not only comply with sweeping regulatory change but also to power new operational efficiencies and create market differentiation. Executive Summary In its depth and scope, Basel III is unlike anything the banking business has seen. A combination of micro- and macro-prudential norms, the global regulatory mandate (which rolls out this year through 2018) 1 requires banks to increase their quality…

Words 5000 - Pages 20

Business: U. s. Securities and Exchange Commission and Sarbanes Oxley Act Essay example

Assignment 5: Sarbanes Oxley Act of 2002 Instructor: Bradley Johnson BUS 592: Financial Accounting & Analysis May 20, 2013 Abstract summary: The Sarbanes Oxley Act of 2002 which was enacted into law based on the recent scandals of a major companies who reported falsified accounting, understating expenses, overstating assets or understating liabilities, use of fictitious and fraudulent transactions and direct falsification of financial statements to give a…

Words 2053 - Pages 9

Comparing Recession to Great Depression Essay

of the Smoot-Hawley Tariff Act. This act, that was passed by President Hoover on June 17, 1930, raised a tax rate of 60% on over 3,200 imported products, which was at record levels, only lower than the Tariff of 1828. This act reduced American world trade by almost 66% between 1929 and 1934. Unemployment rates also jumped from 7.8% in 1930 when this act was passed, to 25% in 1933, just before the act was basically countered in 1934 with the Reciprocal Trade Agreements Act. On “Black Monday”, October…

Words 3158 - Pages 13

Cases Essay

1.Commonwealth v State of Tasmania http://en.wikipedia.org/wiki/Commonwealth_v_Tasmania 2. Lee v Knapp In Lee v Knapp [1967] 2 QB 442 an Act required that a motorist "stop" after an accident. The defendant claimed that they did in fact momentarily halt, before proceeding, therefore complying with a commonly accepted literal meaning of "stop". The judge found that in this circumstance "stop" meant halt and wait for police or other officials to investigate the accident. A literal interpretation…

Words 8681 - Pages 35

Essay on Northampton Group Inc. – Case Study Analyses: How to Increase Shareholder Value

Northampton Group Inc. – Case Study Analyses: How to increase shareholder value Nicole Arends, Jenny Feng, Laura Tromp & Zilha Wever FHTMS University of Aruba Mr. Don Taylor Corporate Finance FTS 2415 March 26, 2013 Introduction This Corporate Finance paper focuses on analyzing the challenges that Northampton Group Inc. (NGI) is facing as it tries to increase shareholder value. In the case study it is stated by the firm’s major shareholders, that they believe…

Words 5328 - Pages 22

Lecture 1 Powerpoint Essay example

BFF 5230 Global Financial Markets Lecture 1: Introduction to international financial markets Do you have a disability, medical or mental health condition that impacts on your study? The Disability Liaison Unit (DLU) provides a range of services for registered students including: • • • • Notetakers and Auslan interpreters Readings in alternative formats Adaptive equipment and software Alternative arrangements for exams For further information and details about how to register: Email: dlu@monash…

Words 4161 - Pages 17

Essay about Moody’s Credit Ratings and the Subprime Mortgage Meltdown

Moody’s Credit Ratings and the Subprime Mortgage Meltdown Table of Contents Introduction……………………………………………….3 Background………………………………………………..4-10 Analysis……………………………………………………10-12 Conclusion…………………………………………………12-13 References………………………………………………….14 In the early-2000s, Moody’s, one of the leading credit rating agencies in the world, evaluated thousands of bonds backed by so-called “subprime” residential mortgages—home loans made to those with both low incomes and poor credit scores…

Words 3036 - Pages 13