The Dodd-Frank Act: Key Features, Implementation Progress, and Financial System Impact

44 Pages Posted: 2 Sep 2014

See all articles by James R. Barth

James R. Barth

Auburn University; Milken Institute

Apanard Penny Prabha

University of Illinois at Springfield

Clas Wihlborg

Chapman University; University West

Date Written: September 1, 2014

Abstract

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) of 2010 provides for a wide variety of new regulatory and supervisory initiatives with the goal to promote a safer and sounder banking system. Our paper puts Dodd-Frank into a historical perspective, identifies its key features, discusses the implementation progress, and assesses whether the law will accomplish its objectives. We conclude that the approach in the law to financial regulatory reform is best described as a Band-Aid approach to financial regulation. A better approach in our view is one that strengthens market discipline on bank risk-taking and enhances competition so as to reduce the regulatory burden and enhance the efficiency and stability of the financial system. Dodd-Frank pays lip service to this objective with the creation of an Orderly Liquidation Authority and the Financial Stability Oversight Council, with the effectiveness of both these new bodies being very much in doubt.

Keywords: Dodd-Frank, Financial Crisis, Financial Stability, Financial Regulation

JEL Classification: G21, G28

Suggested Citation

Barth, James R. and Prabha, Apanard Penny and Wihlborg, Clas, The Dodd-Frank Act: Key Features, Implementation Progress, and Financial System Impact (September 1, 2014). Available at SSRN: https://ssrn.com/abstract=2490037 or http://dx.doi.org/10.2139/ssrn.2490037

James R. Barth (Contact Author)

Auburn University ( email )

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Auburn, AL 36849
United States
334-844-2469 (Phone)
334-844-4960 (Fax)

Milken Institute ( email )

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Santa Monica, CA 90401
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Apanard Penny Prabha

University of Illinois at Springfield ( email )

Springfield, IL 62703
United States

Clas Wihlborg

Chapman University ( email )

333 N. Glassell
Orange, CA 92866
United States
+17147447630 (Phone)

University West ( email )

Trollhättan, 46186
Sweden

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