Dodd–Frank: Accretion of Power, Illusion of Reform

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank or DFA) gained passage on the rationale that it would help the US avoid future financial crises by creating new bureaucracies to fill regulatory gaps purportedly responsible tbr the crisis in 2008. This paper challenge...

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Veröffentlicht in:The independent review (Oakland, Calif.) Calif.), 2015-09, Vol.20 (2), p.197-226
1. Verfasser: Twight, Charlotte
Format: Artikel
Sprache:eng
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Zusammenfassung:The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank or DFA) gained passage on the rationale that it would help the US avoid future financial crises by creating new bureaucracies to fill regulatory gaps purportedly responsible tbr the crisis in 2008. This paper challenges both prongs of the crisis-prevention rationale: the "regulatory gaps" argument and the "beneficent new bureaucracies" contention. This article also identifies tactics federal officials used to make Dodd-Frank difficult and costly for the public to comprehend, resist, modify, or repeal-tactics consistent with the economic theory of "political transaction-cost manipulation." This theory explains in part the economic and political incentives that drive government officials' political behavior, policy initiatives, and regulatory and legislative language (Twight 1988, 1992, 1994, 2002). Despite explicitly stated legislative intentions to the contrary, the powers of the DFA's Financial Stability Oversight Council, Orderly Liquidation Authority, Office of Financial Research, and Consumer Financial Protection Bureau are expanding and reinforcing the very structural elements that contributed to the financial crisis of 2007-2009.
ISSN:1086-1653
2169-3420