Dodd/Frank Banking Act Fails : Less Government - Not More

I know this is old news in that Dodd/Frank was designed to fix our financial mess but instead has made everything more complicated and unworkable.

Again, why would anyone think the Chris Dodd or Barney Frank have any idea of how to fix anything let alone something as big and diverse as our banking system? Remember is was these two that brought on the mortgage financial crisis in the first place along with the democrat party members starting with Jimmy Carter and Bill Clinton.

President George W Bush came to congress on several occasions warning them that this Community Reinvestment Act will crash the system but Barney shot back in no uncertain terms that everything was fine. He lied, and he and Chris Dodd both knew the truth, but it was about the votes they believed they would get, not the country that mattered when the system failed.

Everything is always about the politics with the progressive socialist democrats. Nothing new here, it's always been that way and always will be.

Dodd-Frank Thinks Banks Are Really Special
Source: Vern McKinley, "After the Crisis: Revisiting the "Banks Are Special" and "Safety Net" Doctrines," Mercatus, June 18, 2015.

June 22, 2015

The Dodd-Frank Act sought to reduce the safety net for financial institutions in the wake of the financial crisis. Instead of repealing the multiple, ad hoc bailout provisions, Dodd-Frank codified their structure with what its authors believed to be tighter, stricter limitations.
Provisions included the following:

• Orderly Liquidation Authority (OLA) for nonbanks. OLA is supposed to be an alternative to bankruptcy for nonbank financial institutions.
• Bank-like oversight of nonbanks. Dodd-Frank imposes extended oversight and standards regarding risk-based capital and leverage on nonbank financial institutions.

Current regulatory efforts still attempt to solidify the notion that banks are special: Commercial banks are prohibited from engaging in proprietary trading or activities that involve speculation, such as owning a hedge fund or a private equity fund. This prohibition is intended to reduce the assumed risk banks take on, in order to prevent future demands on the safety net. However, the rule perpetuates the idea that financial regulatory agencies can reduce risk in banking while it also encourages banks to cut back on risk reduction activities in order to avoid regulatory scrutiny.

Some policymakers have called for a return to the regulatory regime of the 1930s through 1990s, under which commercial banks could not be associated with investment banks. Reform-minded legislators neglect important historical facts relating to Glass-Steagall, the 1933 law that separated commercial and investment banking. Risky investments by commercial banks cannot be sufficiently defined, nor can such investments be entirely separated from traditional banking.

Financial institutions of all kinds are subject to risk, but the government should not assume the risk for institutions that are capable of assuming it themselves.