Evening Must-Read: Mike Konczal: Dodd-Frank Reforms Are Finally Paying Off

Mike Konczal: Dodd-Frank Reforms Are Finally Paying Off: “This past year has seen significant advances…

…with at least four major wins. And crucially, the battles that still remain are coming clearly into focus. First, banks are now required by regulators to hold higher levels of capital…. Last fall, the Commodity Futures Trading Commission oversaw the launch of the exchanges for trading derivatives…. Part of the goal of this reform was to enforce price transparency…. Another win was the ruling on the Volcker Rule…. There will be a long implementation process as regulators make calls about what falls inside and outside of the rule, but the fact that it survived this process is important…. The FDIC this past year started to put serious meat on the process of how it would create a death panel for a failed large financial firm…. Conservatives should rejoice. I consistently hear about how Dodd-Frank is a ‘corporatist’ bill that protects firms by labeling them systemically important. And if being seen as systemically important and subject to Dodd-Frank rules was an implicit subsidy—-the ‘biggest kiss’, as Mitt Romney put it during the 2012 debates—then firms should be running toward the designation. The opposite of that happened in 2013….

The Tea Party narrative [now] officially absolv[es]… Wall Street from any and all dubious activity or need for reform…. Jeb Hensarling… mocks the idea that ‘an alchemy of Wall Street greed, outsized risk and massive Washington de-regulation almost blew up the planet’…. In recent years Republicans would at least reference the idea that some reforms were needed, even if they were minimal. That is no longer in play. [Peter] Suderman and other critics are wrong in arguing that there’s no logic behind Dodd-Frank. Dodd-Frank was to port the regulatory system of banks that had kept the economy working during the Golden mid-century period over to the capital markets that have exploded in the past 30 years. This process is slowly working…