Was Trump's 2018 repeal of Dodd-Frank a good idea?

It doesn't force any business to do something when regulations are relaxed.
It allows them to do something that they previously could not have done before.

And from stories about SVG, they pushed hard for the relaxing those regulations in 2018, so they could do more risky business.

 

That's not the point. I think the part that you are not getting is the fact these institutions gamble with other peoples money (depositors money), and when they take excessive risk they lose that money the regular people are hurt. No one cares when corporations gamble and lose their own money, because it only hurts them. Dodd-Frank was put in place after repeal of Glass-Steagall led to collapse of 2008. So, while repealing it does not force banks to gamble, it does allow them to do so, so they take your money and gamble with it and hope to increase their profits.

Should the board members of this bank face the music? Yes. But at the same time they might need to consider amending the laws to what it was before the 2018 rollback (which was not a repeal).

Of course at this time it is still not known whether or not Dodd-Frank would have prevented this from happening.

 

I stand by that comment, because its true, but as I said before we do not know if Dodd-Frank would have prevented this particular incident. Time will tell. Its not vague, or hazy. It is simply not known at this point. Sometimes you have to accept that.

 

People don't run on banks in a vacuum. Yeah, the bonuses just before the crisis, that is seriously problematic.

 

Thats fine. Just don't act like you did not say anything vague and unsupported by detail, because you most certainly did. It is vague. You do not say what would have been different if investigators were in there which is what would be required for the rollbacks to have created this. You make the implication however that it enabled them to use a reckless approach without saying what would have enabled them to make them change course if they had done an audit which Barney Frank says they would not have had a rule in place to stop that error even IF the full force of the Dodd Frank legislation for big banks applied.

By the way, Barney Frank was the author of this legislation. One would think that he would know, and since he is a very liberal Democrat, logic would say he is not doing anything to do Trump any favors. Quite the opposite in fact. If he can pin the blame on Trump he surely will, but in his current position on the board of a failed bank, and knowing full well that this will be gone over with a fine toothed comb, he is not in a position to be playing politics like Warren and Sanders.

 

"They did that all on their own', which they wouldn't have been allowed to do 'all on their own' had Dodd Frank NOT been repealed

No legislation can 'force' anything, they can 'prevent' as in ' not allow' risky banking practices.

Why would the government want to limit a bank's risky practices? I mean, this is a free country, right?

Because they are doing it with YOUR money, NOT their money.

When you deposit money in a bank, you are NOT buying stocks or bonds, heck, you don't even earn interest that is worth a spit, these days. There is no reasonable expectation that you are taking a risk, as you would if you were buying stocks or bonds, for which those pay returns, if the economy swings your way.






.

 

I couldn't agree more. Warren is right, and she knows what she is talking about. And, I hear the FDIC is bailing out businesses above the $250k guarantee, for which their fees for the insurance didn't pay for.

I agree on 'too big to fail', no bank should be allowed to so big that if they fail they become a national security issue.

That has occurred to due the government's lax stance on anti-trust laws, which really took root under Reagan. No big bank should be allowed to merge with another big bank, and smaller ones should be allowed only up to a certain size, and beyond that, no can do.

 

As I understand it, Dodd Frank requires banks to be subject to cash requirements such that they would be able to withstand crises.

It requires banks to be subject ot stress tests, which would reveal weaknesses which would be required to be rectified to bring up to standards set by Dodd Frank.

It wasn't perfect, but it was a step in the right direction.

Trump imitated a tax cut on the super rich which wasn't needed, which contributed to the deficit.

Trump signed a $2Trillion pandemic rescue plan, and Biden did the same, another $2T rescue plan.

Facing inflation that these quantitative easements would inevitably bring, the price for saving the economy, a number of large corporations gouged the public with high prices, especially in the petroleum sector, under the perception that they could blame their prices increases on the inflation which caused more inflation, and then came the war in Ukraine, choking oil supplies, exacerbating the problem.

In this environment, banks are taking risky investments? Still, Dodd Frank would have detected their weaknesses and required them to rectify them.

 

Banking de-regulation by definition makes it easier for them to make riskier investment. That is a fact. I said before we do not know if Dodd-Frank would have prevented this particular incident. Not sure why you find it so hard to accept.

He is doing himself favors, not Trump. He sits on the board, so he is not in position to blame anyone but himself. This bank, with him sitting on the board, lobbied heavily to roll back Dodd-Frank, so if that rollback resulted in this failure, then he'd look twice the fool, and he looks pretty bad already. As a matter of fact, him trying to convince everyone it had nothing to do with it, makes it look somewhat suspicious. Why did he want it rolled back? Was it so he could engage the type of investments they ended up doing, especially with Cryptos? Time will tell.

 

Repealing Dodd Frank allowed bad boys to be bad. We are not dealing with criminals who don't respect the law. Bankers will follow the law, and if the law allows them to get away with risky investments, they will make risky investments, with....................

YOUR money.

 

Do you ever feel like a conversation reaches a point where it just keeps going round and round in circles?

We have reached this point. I have no reason to keep reiterating my point, which was successfully made 8 or 10 posts back. I will happily let this reply from you go unchallenged and let my prior words speak for themselves.

 

1. Frank Dodd wasn't repealed.

2. Trump didn't change any laws...lol

 

Not my money. I didn't have money in SVB.

 

None of this contradicts anything I said. They made these decisions all on their own. Repealing any regulation doesn't force a business to do anything.

And while yes, it was with other peoples money, it was willingly given to them by those people. If you don't want to lose your money, don't give it to a company or bank like SVB (and make sure it is insured).

I bet you all think that if you give your money to a financial planner and they lose it that it's not your fault. Sorry, that's not how it works nor does it matter. These people chose to give their money to SVB, that's on them.

The leftist mindset of it always being someone else's fault is rearing it's ugly head here. SVB failed and it's SVB's fault, period. You give your money to SVB and they lose it....your fault. If it makes you feel better to blame someone else, fine, that changes nothing.

 

SVB didn't do anything fraudulent.

 

True but the cascade came when Theil et al withdrew their funds/holdings and encouraged other investors to do the same. It's also quite possible that the collapse was very profitable to certain players in the stock marketplace ensuring the run.

 

Why didn't Biden and the Democrats in Congress put the regulations back in effect?

 

The question is did the chicken littles short their stock?

 

Seriously speaking, this "****" needs better transparency, when there are players so large that they can totally "influence" the market, that's no longer a free market. I'm not saying it's illegal just needs serious transparency to the general public.

 

Clearly they should have.

Would have been great if they hadn't been removed in the first place, and Biden didn't need to waste time fixing crap that had been screwed up.

 

There's a lot of things Biden wasn't able to accomplish when he had both houses as long as the senate can filabuster which they would have.

So Biden concentrated on legislation he was able to accomplish such as the infrastructure bill which was bipartisan.

Apparently restoring Dodd Frank wouldn't be allowed in the budget reconciliation process which would have been the only way he could have gotten it through

 

Oh I don't know about that when you deposit money in the bank, you're not buying a stock-- you have a reasonable expectation your bank is not making ultra risky investments with your money such that a loss would make the bank fail. Dodd frank would have seriously limited these bank failures.

 

Even if Dodd/Frank stress tests would have prevented issues with the banks you cite and the repeal of those regulations (for smaller banks, such as the ones you cite) then it would stand to reason that having the namesake of the bill, Barney Frank, on your board of directors would have prevented the problem.

Does it blow a hole in this narrative you're promoting that Frank IS in the board of Signature Bank?
https://investor.signatureny.com/governance/board-of-directors/default.aspx

 

My post corrects your mischaracterization of the circumstances that led to the failures

 

Well the curious fact is that barney frank supported Trump's rollbacks

So perhaps that answers your question

Not to mention that signature bank's failure was due to crypto which i believe was beyond the purview of dodd frank Though Dodd Frank would have probably flagged it under the stress test.

https://www.npr.org/2023/03/13/1163...-barney-frank-on-silicon-valley-bank-collapse