Wall Street is screaming because US financial reform is working

http://www.irishtimes.com/business/economy/wall-street-is-screaming-because-us-financial-reform-is-working-1.1887242

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Republican leaders such as Mitch McConnell tried to help their friends with the Orwellian claim that resolution authority was actually a gift to Wall Street. But Wall Street knew better.

Wall Street is screaming because US financial reform is working
Paul Krugman
Tue, Aug 5, 2014, 01:00

Although the enemies of US health reform will never admit it, the Affordable Care Act is looking more and more like a big success. Costs are coming in below predictions, while the number of uninsured Americans is dropping fast, especially in states that haven’t tried to sabotage the programme. Obamacare is working.

But what about the administration’s other big push, financial reform? The Dodd-Frank reform Bill has, if anything, received even worse press than Obamacare, derided by the right as anti-business and by the left as hopelessly inadequate. And, like Obamacare, it’s certainly not the reform you would have devised in the absence of political constraints.

But, also like Obamacare, financial reform is working a lot better than anyone listening to the news media would imagine. Let’s talk, in particular, about two important pieces of Dodd-Frank: the creation of an agency protecting consumers from misleading or fraudulent financial sales pitches, and efforts to end “too big to fail”.

The decision to create a Consumer Financial Protection Bureau should not have been controversial, given what happened during the housing boom. As Edward Gramlich, a Federal Reserve official who warned prophetically of problems in subprime lending, asked: “Why are the most risky loan products sold to the least sophisticated borrowers?”