The Republican Bankruptcy Illusion
There is now near unanimity that the United States’ Dodd-Frank financial reform legislation, enacted in 2010, did not end the problems associated with some banks being “too big to fail.” When it comes to proposed solutions, however, no such consensus exists, and the House Republicans' plan would make things much worse.
WASHINGTON, DC – There is now near-unanimity that the United States’ Dodd-Frank financial reform legislation, enacted in 2010, did not end the problems associated with some banks being “too big to fail.” When it comes to proposed solutions, however, no such consensus exists. On the contrary, financial regulation has become a key issue in November’s presidential and congressional elections.
So who has the more plausible and workable plan for reducing the risks associated with very large financial firms? The Democrats have an agreed and implementable strategy that would represent a definite improvement over the status quo. The Republican proposal, unfortunately, is a recipe for greater disaster than the US (and the world) experienced in 2008.
On the Democratic side, Hillary Clinton’s campaign materials and the party platform point to a detailed plan to defend Dodd-Frank and to go further in terms of pressing the largest firms to become less complex and, if necessary, smaller. Banks must also fund themselves in a more stable fashion. If Clinton wins, she will draw strong support from Congressional Democrats – including her rival for the Democratic nomination, Bernie Sanders, and his fellow senator, Elizabeth Warren – when she pushes in this direction.
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