Taxpayers have been laden with huge debt burdens to rescue the banks and protect the soundness of the financial system. Wall Street banks have lately enjoyed improved earnings and big share gains. But the causes of the credit meltdown have still not been addressed.
The bill from Senate Banking Committee Chairman Christopher Dodd, D-Conn., offers more than 1,300 pages worth of fixes. But length and complexity do not ensure effectiveness.
Derivatives, bank capital and leverage rules, and asset securitization were three root causes of the crisis. Several experts, including Matthew Richardson, professor of finance at the NYU Stern School of Business, question whether the Dodd bill would deal with these issues effectively enough to avert another costly crisis.
Read the full article from Investor's Business Daily with Richardson's comments.