Dodd-Frank and Another Bank Meltdown

In 1933, Congress passed the Glass-Steagall Act. It established the Federal Deposit Insurance Corporation (FDIC) to insure bank deposits. It also required banks to get rid of their trading activities: buying and selling stocks was considered too dangerous for depository institutions.

Are We Protected From Another Collapse?

Banks, Securitization & Incentives by Elliott Morss, Morss Global Finance Introduction The bank crisis was serious – $52 trillion in capital losses leading to the largest global recession since 1929. We should work hard to insure it does not happen again. But there is a problem: there is little agreement on why it happened. The …

The Great Debate©: Will Dodd-Frank be Effective?

Written by Elliott Morss, Bradley G. Lewis and William K. Black Editor’s note: The question of whether the 2010 Dodd-Frank Act will be effective in reducing systemic risk in the financial sector was brought into new focus by a a featured article written by Gabriel Sherman last month in New York magazine.  Sherman discussed ways …

Reforming Repo Rules

by Guest Author Mark Roe, Project Syndicate and Harvard Law School CAMBRIDGE – Sometimes, we just don’t learn. After the financial crisis, the United States enacted the Dodd-Frank Act to overhaul American financial regulation, with the aim of reducing the risk of another financial meltdown. But it did nothing to reform “repo” lending – arguably …

FDIC’s Frank-Dodd Fantasy

The FDIC has released a document that purports to show how it could have successfully resolved Lehman Brothers using its new Title II resolution authority granted under Dodd Frank.

All I can say is that this is an interesting piece of creative writing. The Lehman counterfactual rests on a series of assumptions, which as I will discuss shortly, look pretty questionable.