Question

In: Finance

Describe in your own words what impact you believe the Dodd Frank Act had on the...

Describe in your own words what impact you believe the Dodd Frank Act had on the banking industry. Do you think there are any aspect of the Dodd Frank Act that should be repealed?
Which do you believe is the best forms of savings; a traditional bank savings account, a mutual fund, or a whole life insurance policy? Please explain why you think one of these options is better than the others.

Solutions

Expert Solution

1. Dodd Frank Act was a collection of banking reform and regulation by Obama registration in 2010 In response to the financial crisis.it help in regulating the bank and protecting the customers from predatory and unfair prices.

It has worked in a way that is aiming to stop new financial crisis and it has managed through regulation and enforcement of laws against bank and other financial institution.it has one of the important rule named as volcker rule which is regulating the relationship of bank with hedge fund and private equity fund and it is also regulating the way bank can invest in their own account.

It has also helped the mission of customer protection and financial regulation. it is trying to to focusing on the customer's protection as it is trying to ensure that people who are participating in the financial system are protected from predatory and unruly behaviour by the bank. it is also educating the consumers and it is also giving a support to the whistleblowers.

2 . Many of the provisions of dodd Frank rule was highly authoritarian and there is a criticism of of those provisions of this act because they believe that the regulations are hurting the economic growth and their misdirected and these are the regulations of banking high regulation into the financial system and they are not letting the bank to participate much into the derivative World and they are also trying to monitor the relationship of the bank with the hedge fund and they are putting on arbitrary practice in regards to make such laws which are restricting the profit making ability of these banks in name of consumer protection so there is a huge criticism of this law and I think that there should be a balance between the profit making activity and protection of the interest and both should be promoted.

3. I think the best form of saving would be mutual fund account because I feel that mutual fund account has high professional management and it has also larger potential of investment into various securities and it is highly diversified and customised so one can invest into various categories of the mutual fund for the longer period of time in order to maximize his rate of return as mutual fund are are providing long term investment opportunities and they are trying to offer people with maximizing rate of return with absolute certainty and they are highly regulated so there are lesser chances of fraud also.

Rest of the options are not providing with professional management and opportunity to maximize return because they are having a limited scope of returning the wealth so, it can be said that mMutual Funds are providing with maximum opportunity of returning the returning higher amount of capital appreciation to the shareholders.


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