Will the Dodd-Frank financial regulatory overhaul thwart a future crisis?
That depends on who you ask.
“While the Dodd-Frank bill improved matters, it went nowhere far enough: the problems continue, and as long as they continue, our economy is at risk,” Joseph E. Stiglitz, the Nobel Prize-winning economist, told the Senate Banking Committee on Wednesday.
Conversely, a former top financial regulator testifying at the Senate hearing cautioned that the law bordered on overkill. Eugene A. Ludwig, the former comptroller of the currency during the Clinton administration, praised portions of the Dodd-Frank Act while warning that it could put “a deleterious drag on capital formation and meaningful job opportunities for our people.”
“Like any strong medicine,” he said, “if applied incorrectly or excessively, the Dodd‐Frank Act can produce more harm than good.”
The debate at the hearing reflected larger partisan wrangling over the law, enacted in response to the financial crisis.
Democrats largely back Dodd-Frank, saying Wall Street was long overdue for a crackdown. Republicans counter that the law will crimp the banking industry’s profit-making engines at a fragile time for the American economy. Conservative lawmakers in the House of Representatives have introduced some two-dozen measures to kill or roll back the law.
in full:
http://dealbook.nytimes.com/2011/08/03/is-dodd-frank-overdue-or-overkill-2-dueling-views/
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