Administering Dodd-Frank: Unfinished Business from the Financial Crisis

As happens too often in Washington, major unfinished business from the financial crisis relates to public administration: trying to implement effective supervision of banks, and especially big banks. Only with boots on the ground can financial regulators try to ensure that an institution accurately detects and addresses major vulnerabilities in the way it does business. Although Dodd-Frank eliminated the hapless Office of Thrift Supervision, and thereby made the Fed the sole regulator of bank and thrift holding companies, serious jurisdictional divisions remain. Ultimately, quality of supervision must be strengthened so that chief executive officers - and their powerful trade associations - develop enough trust in the motivation and capability of bank supervisors that they assent when supervisors seek to curtail seemingly profitable but imprudent activities