Dodd/Frank Banking Bill Insures Another Crisis? Progressive Failures?

How is it possible to have a common sense debate on banking regulations with the progressive socialist liberals democrats, and worse, use the word "transparent" at the same time. Progressives have no intention of allowing anyone to see what's going on behind the current, let alone engage others in debate. It's not what they do or who they are.

The solution is obvious, limit the government involvement and let the free market do the job. Guide the industry, not rule the banking industry. Government power, especially a progressive socialist liberal government, will destroy freedom and prosperity, it's the agenda and the very basis for the progressive ideology. Without that power, it cannot survive.

Progressive socialism will not produce anything but subsistence and failure. History is full of examples of this failure. Europe is one, but they at least are seeing the error of their ways and are making an effort to change direction.

Progressive socialist leaders in America are headed into the darkness of those European failures from which traditional socialists are crawling back into bright lights of the free market. Who are these people that want failure and why do so many vote over and over again for failure?

Is Another Financial Crisis On the Way?
Source: Stephen A. Schwarzman, "How the Next Financial Crisis Will Happen," Wall Street Journal, June 9, 2015.

June 11, 2015

After the financial crisis, a focus on safety and soundness was good medicine for the financial system. New bank liquidity and capital policies, among other initiatives, strengthened a debilitated patient. The banking system is now stronger, with more liquid assets and better underwriting standards.

Despite good intentions, however, politicians and regulators constructed an expansive and untested regulatory framework that will have unintended consequences for liquidity in our financial system. Taken together, these regulatory changes may well fuel the next financial crisis as well as slow U.S. economic growth.

The Volcker Rule, for example, bans proprietary trading by banks. The prohibition, when combined with enhanced capital and liquidity requirements, has led banks to avoid some market-making functions in certain key equity and debt markets. This has reduced liquidity in the trading markets, especially for debt.

A liquidity drought can exacerbate, or even trigger, the next financial crisis. Why should we care?

• Because new capital, liquidity and trading rules are interrelated, and locked-up markets and rapidly falling securities prices will force banks to reduce assets and hoard liquidity in order to satisfy applicable regulatory tests. 
• Small business owners will be particularly vulnerable because the number of community banks declined by 41 percent between 2007 and 2013. Recent studies by economists at the Richmond Federal Reserve and Harvard University both concluded that the 2010 Dodd-Frank financial law contributed to this decline.

It has been five years since Dodd-Frank became law, and time for a fresh look at its impact. We need a holistic regulatory review of the cumulative effect of post-crisis capital, liquidity and trading rules on the availability of credit and liquidity. Any review needs to be transparent, coordinated domestically and internationally and proactively engage a broad base of regulators, industry leaders, economists and consumers.