The controversial Dodd Frank financial reform law was passed almost five years ago. Officially known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, the new law was designed to rein in the excesses of the financial industry that led to the Great Recession of 2007-2009.
Dodd-Frank was, however, highly controversial, with political progressives saying it only went half way in stopping “too big to fail” megabanks and conservatives claiming it would strangle the financial sector with additional regulations.
According to a July 16th Dodd-Frank Progress Report from Davis Polk, while significant progress has been made, only around three-quarters of the new regulations required by Dodd-Frank have been finalized and implemented to date.
Jim O’Shaughnessy: Fear Signals Created By The Reptilian Brain
ValueWalk's Raul Panganiban interviews Jim O’Shaughnessy, Chairman, Co-chief Investment Officer, and Portfolio Manager at O’Shaughnessy Asset Management. In this part, Jim discusses the fear and emotional signals created by the reptilian brain. Q1 2020 hedge fund letters, conferences and more That's very cool. For the factor to try to seek the reason why it works, Read More
Details on Dodd-Frank Act regulatory deadlines
According to the Davis Polk report, as of July 15, 2015, 271 new rule-making deadlines relating to the Dodd-Frank Act have now come and gone. Among the 271 new rule-making deadlines, 192 (70.8%) were met with finalized rules, and rules have been proposed for another 46 (17.0%). However, new regulations have not been proposed relating to 33 (12.2%) rule-making requirements that have already passed.
Of note, among the 390 total requirements to develop new regulations, finalized rules have been provided for 247 (63.3%), and proposed rules have been submitted that would lead to another 60 (15.4%) being met. The report notes, however, that no rules have been proposed for 83 (21.3%) Dodd-Frank Act rule-making requirements.
More on the Dodd-Frank law
The Dodd-Frank Act creates a number of new federal agencies and merges and phases out others to try and streamline the regulatory process, improves oversight of financial institutions seen as a systemic risk and encourages transparency by both banks and regulators. The proponents of the law say it provides rigorous standards and oversight to the benefit of the economy, consumers, investors and businesses, will end taxpayer funded bailouts of financial institutions, will set up an advanced warning system on the economy, and create new, fairer rules on executive compensation and corporate governance.
All of the new agencies are either given power over a sector of financial regulation, or that power is transferred from an existing agency. All of the new agencies (and some old ones that are not currently required to) must report to Congress on an annual or biannual basis to present the results of their efforts and to outline future plans. The major new agencies created by Dodd-Frank include the Financial Stability Oversight Council, the Office of Financial Research and the Bureau of Consumer Financial Protection.
See full PDF below.