Cited as one of the most influential and paramount financial regulation since 1930’s, Dodd-Frank act and Consumer Protection Act was passed by the Obama Administration in 2010 as a response to the financial crisis of 2008. It is not a hidden fact that after the repealing of Gramm-Leach-Bliley Act in 1999, commercial banks again started investing in unregulated derivatives, and this unregulated and least supervised investment channels of banks led to formation of cowboy financing, eventually leading to massive carnage in the US economy in the form of financial crisis of 2007-08. Learning from the mistake of past government, and to endow a supervisory eye on investments and risk channels of the bank, the Obama Administration passed the law in order to have a sweeping impact on the delivery of financial services in the United States. Therefore, Dodd-Frank Act is a legislative proposal to reform the entire financial service industry in the United States, in order to prevent financial crisis.
Financial Stability Oversight Council (FSOC)
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Additionally, Title I of the act also requires the Federal Reserve to introduce more stringent standards relating to capital requirements for the bank, and also establish a new supervisory framework for the regulation of big banks and large non-financial
In addition, the Federal Reserve did badly on supervision of the financial market. Many banks did not have enough ability to value their risk. The Federal Reserve and other supervision institution should require these banks to enhance their ability of risk valuing.
Another federal legislation that was passed into law during the period was the Federal Reserve Act. The Federal Reserve Act of 1913, focused its energies on creating a new banking system with twelve regional Federal Reserve Banks, and each of whom were owned by member banks in its district. Also, all of the national banks automatically were members while state banks could join if they wished.
In late 2008, the world economy seemingly grinded to a halt. Wall Street, unable to reconcile the liquidity crisis and financial losses that stemmed from its bad bets on mortgage backed securities, turned to the United States government for help. What resulted was the $700 billion Troubled Asset Relief Program (“TARP”), the largest government bailout in the history of the United States. After the dust settled and Wall Street, with hundreds of billions of taxpayer dollars, managed to avert a global financial meltdown, Congress put pen to paper to ensure that the same crisis would never happen again. On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), a nearly 900-page behemoth of financial reform, was signed into law. The Dodd-Frank Act was meant to reform that the unsavory and opaque practices that led to the 2008 crisis – it does so by introducing a stricter financial regulatory regime in which Wall Street must operate.
The Dodd-Frank Wall Street Reform and Consumer Protection Act’s policies haven’t really been implemented to the extent that regulators would have liked. Although the legislation takes many steps in addressing systematic risks in the United States financial system and improving coordination among regulators, some critics believe that alternative options might have been more effective. The coming years will give us a better understanding of how well the Dodd-Frank Act addressed these concerns.
The Federal Reserve System is the central banking authority of the United States. It acts as a fiscal agent for the United States government and is custodian of the reserve accounts of commercial banks, makes loans to commercial banks, and is authorized to issue Federal Reserve notes that constitute the entire supply of paper currency of the country. Created by the Federal Reserve Act of 1913, it is comprised of 12 Federal Reserve banks, the Federal Open Market Committee, and the Federal Advisory Council, and since 1976, a Consumer Advisory Council which includes several thousand member banks. The board of Governors of the Federal Reserve System determines the reserve requirements of the member banks within statutory limits, reviews and determines the discount rates established pursuant to the Federal Reserve Act to serve the public interest; it is governed by a board of nine directors, six of whom are elected by the member banks and three of whom are appointed by the Board of Governors of the Federal Reserve System. The Federal Reserve banks are located in Boston, New York, Philadelphia, Chicago, San Francisco, Cleveland, Richmond, Atlanta, Saint Louis, Minneapolis, Kansas City and Dallas.
Thirdly was the introduced and the establishment of the Federal deposit Insurance Corporation or the FDIC. This ensures that each and every individual bank account is insured up to $100000.
Established in 1914, the Federal Trade Commission is an independent regulatory agency in the United States. Its main role is to create a fair and competitive business trade in the United States. Originally established under President Wilson’s administration, the FTC was created to protect the public and businesses from unfair business trade and to formulate a strong and reliable relationship between consumers and businesses. Members of the Federal Trade Commission are appointed by the President and authorized by the Senate. Generally, the FTC is consisted of five appointed members that are sworn in for seven-year terms. However; the current structure of the FTC has only four appointed members: one chairman and three commissioners. Currently, FTC has one vacant commissioner position (FTC.gov, 2014). The current organizational chart of the FTC is constructed as follows: Edith Ramirez (Chairwoman), Julie Brill (Commissioner), Maureen Ohlhausen (Commissioner), and Joshua D. Wright (Commissioner) The Federal Trade Commission also consists of various offices, each constructed to focus on different areas of regulation and rulemaking.
Major banks are cutting back on some of their legally permitted operations, such as- market making, and that has led to liquidity issues in the bond markets. Proprietary trading could become unregulated if more banking activities continue moving towards the shadow banking system. This would essentially defeat one of the main purposes of Volcker Rule. [d] The third major unintended consequence has been the degree by which the Federal Reserve has become the main regulator of the finance industry. In order to discourage future bailouts similar to the ones during the financial crisis, the Dodd-Frank Act limited the Fed’s emergency powers. However the liquidity and capital standards now imposed by Fed has purportedly become one of the most important regulatory developments of the Dodd-Frank Act.
Health insurance, too many American citizens, is not an option. However, some citizens find it unnecessary. Working in the health care field, I witness the effects of uninsured patients on medical offices. Too often, I see a “self-pay” patient receive care from their doctor and then fail to pay for it. Altogether, their refusal to pay leaves the office at a loss of money and calls for patients to pay extra in covering for the cost of the care the uninsured patient received. One office visit does not seem like too big of an expense, but multiple patients failing to pay for the care they receive adds up. Imagine the hospital bills that patients fail to pay; health services in a hospital are double, sometimes triple, in price at a hospital. It is unfair that paying patients are responsible for covering these unpaid services. Luckily, the Affordable Care Act was passed on March 23, 2010, otherwise known as Obamacare. Obamacare is necessary in America because it calls for all citizens to be health insured, no worrying about pre-existing conditions, and free benefits for men and women’s health.
As I’m coming to the twilight of my undergraduate degree at Charter Oak Stat College, I’ve chosen to write about the Affordable care act so I can better understand the reality of today’s healthcare system from the facilities, providers and patients point of view. I feel understanding this information will help me create an environment that can adapt and accelerate through the transition due to the affordable healthcare act’s broad impact on healthcare as it was once known and practiced. I feel whether I move forward as a nurse, provider or administrator, this information will be invaluable.
In 1913, Wilson and Congress passed the Federal Reserve Act to make a decentralized national bank containing twelve local offices. By and large, all the private banks in every district possessed and worked that separate area's branch. In any case, the new Federal Reserve Board had the last say in choices influencing all branches, including setting financing costs and issuing money. This new managing an account framework settled national funds and credit and helped the monetary framework survive two world wars and the Great
In October of 1929, the American economy took a huge hit from the stock market crash. Since so much people had invested their money and time in the banks, when the banks closed many had lost all of their money and were in the deep poverty. Because of this, one of my first actions of the New Deal was the Federal Deposit Insurance Corporation (FDIC). Every bank in the United States had to abide by this rule. This banking program I launched not only ensured the safety and protection of deposits made my users of banks, but had also restored America’s faith in banks, causing people to once again use banks which contributed in enriching the economy. Another legislation I was determined to get passed...
The "subprime crises" was one of the most significant financial events since the Great Depression and definitely left a mark upon the country as we remain upon a steady path towards recovering fully. The financial crisis of 2008, became a defining moment within the infrastructure of the US financial system and its need for restructuring. One of the main moments that alerted the global economy of our declining state was the bankruptcy of Lehman Brothers on Sunday, September 14, 2008 and after this the economy began spreading as companies and individuals were struggling to find a way around this crisis. (Murphy, 2008) The US banking sector was first hit with a crisis amongst liquidity and declining world stock markets as well. The subprime mortgage crisis was characterized by a decrease within the housing market due to excessive individuals and corporate debt along with risky lending and borrowing practices. Over time, the market apparently began displaying more weaknesses as the global financial system was being affected. With this being said, this brings into question about who is actually to assume blame for this financial fiasco. It is extremely hard to just assign blame to one individual party as there were many different factors at work here. This paper will analyze how the stakeholders created a financial disaster and did nothing to prevent it as the credit rating agencies created an amount of turmoil due to their unethical decisions and costly mistakes.
During the 1920s, approximately 20 million Americans took advantage of post-war prosperity by purchasing shares of stock in various securities exchanges. When the stock market crashed in 1929, the fortunes of many investors were lost. In addition, banks lost great sums of money in the Crash because they had invested heavily in the markets. When people feared their banks might not be able to pay back the money that depositors had in their accounts, a “run” on the banking system caused many bank failures. After the crash, public confidence in the market and the economy fell sharply. In response, Congress held hearings to identify the problems and look for solutions; the answer was found in the new SEC. The Commission was established in 1934 to enforce new securities laws that were passed with the Securities Act of 1933 and the Securities Exchange Act of 1934. The two new laws stated that “Companies publicly offering securities must tell the public the truth about their businesses, the securities they are selling and the risks involved in the investing.” Secondly, “People who sell and trade securities must treat investors fairly and honestly, putting investors’ interests first.”2
Reserve Requirements, it is the amount of funds that the financial institutions have to hold in their vault. No one has the right to change the Reserve requirement, yet the Board of