Monday marked the fourth anniversary of the Dodd-Frank financial reform law, and Peter Wallison, a senior fellow at the American Enterprise Institute is none too impressed with the law.
"Four years later, Dodd-Frank's pernicious effects have shown that the law's critics were, if anything, too kind," he writes in
The Wall Street Journal. "Dodd-Frank has already overwhelmed the regulatory system, stifled the financial industry and impaired economic growth."
When it comes to the regulatory system, only 208 of the act's 398 mandates have been implemented, and more than 45 percent of congressional deadlines have been missed, Wallison notes.
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"The effect on the economy has been worse," he argues. The economy's recovery from the 2007-09 recession has been the slowest in history, according to a Dallas Federal Reserve Bank study.
As for the banking sector, "uncertainties, costs and restrictions have sapped the willingness or ability of the financial industry to take the prudent risks that economic growth requires," Wallison states.
"Dodd-Frank — by far the most intrusive and costly financial regulation since the New Deal — placed few if any limitations on regulatory power."
Private equity star J. Christopher Flowers, CEO of J.C. Flowers, says that the global wave of bank regulation following the 2008 financial crisis has had the exact opposite effect of what was intended.
"How do you make something that lends money at risk a utility?" Flowers asks the
Financial Times. "That you could design this so that there would never be another banking crisis again is a utopian idea. I guarantee that we will have another banking crisis."
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