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An Unhappy Birthday For Dodd-Frank As Momentum Builds For The Next Meltdown

"Sunday marks the third anniversary of the Dodd-Frank Wall Street Reform Act. Remember when it was touted as the solution to all of the problems that caused the financial meltdown of 2008?

"I won’t be lighting any celebratory candles and neither should you. Except for a recent promising development involving capital requirements for megabanks, Dodd-Frank has not delivered on what it promised. By and large, those agencies charged with writing the regulations to bring the legislation to life have been overwhelmed by a combination of congressional underfunding and a massive lobbying effort by the megabanks that increasingly seem to control Washington. The Davis Polk law firm has been keeping tabs on what has actually been accomplished. Their latest count says that only 155 of the 398 rule makings required by Dodd-Frank have been finalized.

"The economy has improved. The banks are making gigantic profits and insist it can never happen again. The White House and the Treasury Department see little need for further action. Neither do many members of Congress. We have gone right back to the 'what, me worry' attitude we had until the day before Lehman Brothers went belly up. Remember Citibank’s Charles Prince and his infamous rationalization, 'As long as the music is playing, you’ve got to get up and dance'?

"The music is playing again and the same dancers are on the floor, because we have not fixed many of the things most experts agree caused the meltdown. Another financial crisis is inevitable."

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