Suzy Khimm checks in on the impact of Wall Street reform upon Dodd-Frank’s four-year anniversary yesterday:
We’ve eliminated some of the causes of the last crisis, but that doesn’t mean we’ve prevented the next one. The toxic mortgage products that led to the last financial collapse have been all but eliminated from the marketplace. If anything, policy experts and advocates are concerned that federal officials have gone too far in tamping down mortgage risk. But the next crisis isn’t likely to resemble the last one. Faced with increased regulation and scrutiny in one sector, financial institutions will simply turn to other kinds of financial products. A post-recession boom in subprime auto lending and junk-rated corporate debt, for instance, have recently raised concerns that few had anticipated four years ago. Such risky loans will continue unless regulations are implemented and enforced more effectively, said [finance professor Anat] Admati.
Patrick Caldwell blames regulators and Republicans for failures in implementation: