Question

Please list and explain at least 3 main provisions of the Dodd-Frank Act of 2010 that are designed to prevent the next crisis or make it less severe.

Answer 1

Dod Frank act of 2010 is a comprehensive and complex bill that contains hundreds of pages and includes 16 major areas of reform.It officially became law in July 2010.

The great recession that began inDecember 2007 and lasted 2009 left millions of Americans employees unemployed that resulted ineconic decline worldwide.It helps in preventing illegal actions taken by the banks and protecting consumer interests and thushelps I. Preventing another financial crisis.

Provisions

1. Consumer financial protection bureau

(CFPB)

It protects consumers from the corrupt business practices from banks and other financial Institutions .It is an independent financial regulator to oversee the consumer finance markets.It formulates new rules in order to control and supervise certain financial companies.

2.Financial stability Oversight counsil(FSOC)

It identifies the risk.Its most important initial responsibility is designating systematically financial institutions.It is a group composed of deputies of the treasury department and and financial regulatory to identify the modern risk department

3.Derivative regulations.

This provision also mandated that firms buying and selling derivatives to Use clearing house to do so.It act as clearing house and strongly capitalised in order to pay out losses if a firm defaults on its obligations.