Dodd-Frank Act Signed
Signed July 21, 2010, almost two years after Lehman's bankruptcy. The law ran roughly 2,300 pages and required regulators to write hundreds of implementing rules. Most standardized derivatives moved to central clearing. The Consumer Financial Protection Bureau was created. Systemically important banks faced new capital, liquidity, and stress-testing requirements. The Financial Stability Oversight Council was given authority to designate non-bank firms as systemic. Full implementation took nearly a decade, and several provisions were later loosened under the 2018 rollback.
The implementation took nearly a decade — final rules under the Volcker Rule were not settled until 2019. By then, much of the risk had migrated to less-regulated parts of the financial system: private credit, shadow banking, and crypto.
06 · Dodd-Frank
The risk was named in 1994. Brooksley Born, chair of the CFTC, warned that unregulated derivatives could threaten the financial system. She was overruled by Greenspan, Rubin, and Summers. In 2008 the thing she warned about happened. In 2010, two years after the crisis, Congress passed Dodd-Frank.
Read the full era →