![]() On the day he signed Dodd-Frank into law, President Obama tried to distill some of those flaws and place them into a few broad categories. Through its wide-ranging prescriptions for everything from mortgage lending to shareholder voting to derivatives clearing, and despite the fact that few congressional Republicans supported it, Dodd-Frank reveals where Congress saw flaws in the US financial system. They need not agree with President Obama’s broad description of those causes, however, to understand that it summarizes how legislators perceived those causes in 20, when members of Congress began to craft the Dodd-Frank Act. Scholars, practitioners, and casual observers will debate for years to come the precise causes of the 2008 financial crisis. President Barack Obama, from prepared remarks at the signing ceremony for the Dodd-Frank Wall Street Reform and Consumer Protection Act, J1 And while the rules left abuse and excess unchecked, they left taxpayers on the hook if a big bank or financial institution ever failed. Firms like AIG placed massive, risky bets with borrowed money. ![]() Unscrupulous lenders locked consumers into complex loans with hidden costs. For years, our financial sector was governed by antiquated and poorly enforced rules that allowed some to game the system and take risks that endangered the entire economy. It was a crisis born of a failure of responsibility from certain corners of Wall Street to the halls of power in Washington. While a number of factors led to such a severe recession, the primary cause was a breakdown in our financial system.
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