Christopher Dodd's Regulatory Reform is An Act of Courage

Christopher Dodd just held a news conference to explain his new blueprint for sweeping financial reform.

The Dodd Bill that was just unveiled does several things:

(1) It enables greater control over banks,

(2) It enables the government to orderly unwinding of those banks that were previously believed to be too big to fail,

(3) It facilitates some supervision of large hedge funds, and

(4) It implement some level of consumer protection where highly complex derivative instruments are involved. 

It is not a bill to destroy the financial industry.  However, it is not regulation which would ever gain the support of the financial industry.  The regulation therefore can only be put through by someone who does not need to answer to the banking lobby in a re-election campaign. 

As Dodd said, this regulation isn't going to stop the next crisis.  It however may help to prevent it and it will certainly help to limit the consequences of it.

I applaud Dodd for taking a bold step.

 

Jason Rodgers
Jason Rodgers: Jason Rodgers was an experienced research analyst for a major bank prior to retiring to run his own investment consultancy in beautiful Lihue, Hawaii. Jason contributed articles to BestCashCow from 2008 to 2014.

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