President Donald Trump wants to dismantle much of the Dodd-Frank Act of 2010, which was designed to prevent another financial crisis. The law barred banks from many profitable but risky businesses, forced them to add loss-absorbing capital, and required them to make detailed plans for how to shut down in a crisis. Critics say it made banks wary of lending by overburdening them with rules, hampering the economic recovery. Bloomberg View columnists Tyler Cowen and Noah Smith met online to debate Trump’s proposal.
Smith: Dodd-Frank is an incredibly complex, multifaceted piece of legislation. So it’s almost certain that many of its provisions will turn out to have been unnecessary. I think it’s always good to revisit these reform bills years later, after political pressure to “do something” has subsided, and fix the parts that don’t work.