Economics of Contempt on the One-Year Anniversary of Dodd-Frank

Editor’s Note: The following post comes to us from Margaret E. Tahyar and Gabriel D. Rosenberg of the Financial Institutions Group at Davis Polk & Wardwell LLP.

Michael Johnston submits:Financial stocks will be in focus in coming days, as investors digest financial reforms agreed upon by lawmakers in a bill known as the Dodd/Frank Act. These reforms were passed early Friday in what many are calling the most sweeping regulatory overhaul on the American financial system since the 1933 and 1934 Security Exchange Acts were instituted in the wake of the Great Depression.

By James Kwak Last week I disagreed with Paul Krugman’s dichotomy between limiting banks’ scale and scope and restricting banks’ risky behavior. Today Krugman has another op-ed, this time criticizing the current Senate bill for not being sufficiently “fool-resistant.” This time, I basically agree with him.

Senator Shelby, Ranking Republican of the Banking Committee, has sponsored The Financial Regulatory Responsibility Act, which seeks to restrict implementation of Dodd-Frank, and require benefit-cost analysis for financial regulation. To quote Sen.

Last week marked the first anniversary of the Dodd-Frank financial regulation bill, and the news this week is full of perspectives on the debt ceiling "crisis." Common Cents Investing (CCI) tries to avoid political commentary, and this post is certainly not trying to be political. However, these events seemed like a good trigger to take a step back and take a broader perspective on the state of the overall global financial system.