Forum Statement on Five-Year Anniversary of Dodd-Frank Act
Over the past five years, through legislative, regulatory, and industry-initiated changes, significant improvements have been made to strengthen the U.S. financial system. Bank capital and liquidity have more than doubled to record levels, leverage has been reduced, risk management procedures and methodologies have been improved, compensation structures have been reformed to align incentives with the safety and soundness of the institution, and large financial institutions are less complex. Annual stress tests show that large financial institutions can withstand a crisis far worse than 2008, and the largest firms have developed ‘living wills’ to guide an orderly wind-down in the event of a crisis without putting taxpayer money at risk.
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U.S. Global Banks Have More Than Doubled Their Capital Ratio Since 2009
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