– “Today marks the four-year anniversary since President Obama signed into law
the Dodd-Frank Wall Street Reform and Consumer
Protection Act, the most comprehensive set of
reforms to our financial system since the Great Depression.
When the financial crisis gripped the U.S. and global
economies in 2007 and 2008, its damage was felt not only by financial markets
but rippled through the entire economy, resulting in trillions of dollars of
lost wealth, millions of lost homes and jobs, and countless lives
upended. The government’s response to the crisis was forceful, but as we
worked to repair the damage, we also pursued Wall Street Reform to lay the
groundwork for a safer financial system and to curtail the behavior and
practices that put our financial system and economy at risk.
We have reached many significant milestones since the
passage of Wall Street Reform:
For the first time,
there is a federal agency dedicated to protecting consumers in the financial
marketplace, with the Consumer Financial Protection Bureau fully established
and committed to making financial services and products work better for
We established the
Financial Stability Oversight Council, which has worked to fulfill its mandate
to assess risks to financial stability across the financial system, work to
mitigate those risks, and promote market discipline.
With the Volcker Rule
finalized, taxpayers no longer stand behind banks’ risky proprietary trading,
and banks’ CEOs must establish a “tone at the top” that sends the right signal
to the whole firm.
The largest banks are now
subject to annual stress tests, they must maintain higher levels of
high-quality capital, and they are developing living wills that explain how
they could be resolved in the event of their failure.
Regulators now have a
way to wind down a failing financial institution that protects the broader
economy without leaving taxpayers on the hook – a tool we did not have when the
financial crisis hit.
And we have brought
over-the-counter derivatives markets out of the shadows and into regulated
trading and central clearing, increasing transparency and reducing excessive
risk taking that was at the heart of the financial crisis.
Implementing Wall Street Reform has taken time, often
longer than we would like, but our work to improve the resiliency of the financial
system must continue. Regulators are completing action to address
structural weaknesses in important market-based finance activities, such as
money market funds and tri-party repo, which have presented risk to the
financial system as a whole. But as we recognize these accomplishments,
we must always remain vigilant to new risks. Further, the financial
system is global in nature, and we must continue to push for stronger standards
around the world. Nevertheless, we can say without question that our
financial system is safer and stronger as a result of these hard-won reforms,
and today our economy is in a far better position to grow and create jobs.”