Question

6) Dodd Frank brought deep reforms to financial institutions. Name three significant changes to the law, and the nature and implications for each of these/  

Answer 1

The key reason the legislation sought to avoid another possible financial crisis was by introducing more tools to control and enforce laws against banks and other financial institutions in which the government would. One of these most important was the Volcker Law. This law, named after a former Federal Reserve chairman, governs how banks are permitted to lend with their own accounts. The Volcker rule strictly governs the relationship that the banks can have with hedge funds and private equity funds. It specifically prohibits certain activities centered around short-term derivatives, securities, and commodities trading.

Dodd-Frank has established a range of new federal agencies to help fulfill the consumer protection and financial regulation project. The Financial Stability Oversight Council (FSOC) and the Consumer Financial Protection Bureau (CFPB) are two of the most well-known and important. The FSOC tracks the risk of major banks tapping into the US financial system. Specifically, it aims to ensure that no bank is "too big to fail," which would pose financial risk if it were to collapse successfully and trigger a government bailout like those following the 2008 crisis. Many have been roundly questioning these Government bailouts.

First of all, Dodd-Frank extends the whistleblowers to cover not just the organization's direct staff but also those who work for the branches or associates of the business. This also provides a bounty program that helps whistleblowers to receive between 10 per cent and 30 per cent of the payout that comes from the business case. The bill also expanded the statute of limitations for whistleblowing to 180 days after the crime was revealed.

Critics of Dodd-Frank claim that Dodd-Frank often reduces the growth capacity of these institutions and decreases the overall market liquidity by restricting the risks a financial business can take. Opponents argue that the introduction of legislation hampers smaller financial institutions and community banks.
Dodd-Frank might come in for further improvements. The most significant may be the Volcker rule's eventual easing, which would make it easier for banks to transact.