Econ: Wall Street Reform and Consumer Protection Act Question

consumer protection

Bureau of Consumer Financial Protection; protect borrowers from being exploited through what seemed to be great financial deals that they did not fully understand

regulation of shadow banks

Financial Stability Oversight Council given the right to designate certain institutions as "systematically important" even if they weren't typical deposit banks; these institutions would be subjected to bank-style regulation including high capital requirements and limits on the kinds of risks they could take.

purpose of law

an attempt to extend the spirit of old-fashioned bank regulation to today's more complex financial system after the 2008 financial crisis

Four elements of the new law

consumer protection, derivatives regulation, regulation of shadow banks, resolution authority

resolution authority

federal government acquire this; the right to seize troubled financial institutions similar to the way it normally takes over troubled banks

derivatives regulation

new rules on trading derivatives, most derivatives would now have to be bought and sold as exchanges where everyone could observe their prices and volume of transactions; to make risks taken by financial institutions more transparent

Dodd-Frank bill

other name for the law