Dodd Frank Pros And Cons

The Dodd-Frank Wall Street Reform and Consumer Protection Act was formed after the catastrophic collapse of the financial system during 2008 to 2009. The act re-established the financial system's credibility by improving its accountability and transparency ending the concept of bailouts. It serves as a safeguard put in place by the government to prevent a future collapse. As always in politics parties take opposite sides on issues and with this act the same can be said. Due to the opposition between parties the act was turned into an extremely complex piece of litigation.

Paul Krugman: Dodd-Frank Financial Reform Is Working
In our first source Paul Krugman gives his beliefs on the act siding with the left. In his article called Dodd-Frank Financial Reform Is Working found in the New York Times he focuses on what he calls “two important pieces of Dodd-Frank”. The first being the Consumer Financial Protection Bureau “an agency protecting consumers from misleading or fraudulent financial sales pitches”. He then mentions the second referring to the economic theory known as “too big to fail” or belief that some corporations are just too important to the economy to lose so the government ends up providing support to the corporation. This is also known as a bailout and is one of the big things Dodd-Frank tries to end. At the end of article he asks if the …show more content…
In this article the author talks about the pros and cons of financial regulatory reform. For an example one pro is that the act requires lenders to have a full and fair disclosure to credit consumers. Another pro is that banks must be well capitalized and well managed. One con is that the Glass-Steagall Act hasn’t been reinstated. Another con mentioned is that the act won't break up banks that represent a risk to our economy because of their large