Economics PAN: Financial Reform and Stimulus: Legislation and Regulation

.  back to >Economic Issues homepage > Background to the Financial Crisis

Policies for the  recovery and growth of the economy are intertwined with achieving reform of the financial services sector, so the separation into the categories of ' financial regulation and reform'  and stimulus is quite arbitrary. However, it is useful for ease of access to particular laws, regulation and proposals.

Financial Regulation and  Reform Legislation

The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law on July 21 2010 by President Obama. This Wikipedia article provides a good summary of its genesis, development and major provisions.

The Volcker Rule proposal is a key part of a strategy for financial reform.  Its intention was to produce a form of 'ring-fencing,' whereby financial institutions would not be able to trade for their own benefit using funds guaranteed by the federal government.

As an early June 23 2010 American Progress  article explained

"The overarching goal would be to ensure that federally backstopped institutions stick to core banking practices such as lending and deposit taking while removing the federal safety net from riskier activities that are divorced from customer services. This is an important reform of the financial sector because such trading endangered financial companies that were too big and interconnected to fail, thus necessitating federal rescues, and was also one of the practices that helped inflate the housing bubble." """""

The regulators charged with carrying out the proposal are mandated to produce the rules by October 18, 2011. However, this Wall Street Journal article (which only considers the issues from the financial services' perspective) suggests the deadline will not be met.  

 Proposals on the table  2008 - 2009

Government

Independent Groups/Non-US Treasury in 2008 -2009  Gro

G-20 Financial Stability Board. Declaration on Strengthening the Financial System. London 2 April 2009

Group of Thirty. A Framework for Financial Stability. January 15 2009. The Group of Thirty was established in 1978 as a private, nonprofit, international body composed of very senior representatives of the private and public sectors and academia 

  International Monetary FundDeclaration on Strengthening the Financial System.  Declaration on Delivering Resources through the International Financial Institutions. London, 2 April 2009. ( A summary is here) LeLeade

 UK Financial Services Authority. The Turner Report. London March 2009.

 

Economic Recovery and Stimulus

Current proposals

2011  President Obama has proposed the American Jobs Act. You can watch the speech, read the full proposal or an overview.

Past legislation

Links to key legislation and policy proposals can be found below.

2009 The American Recovery and Reinvestment Act was passed and then signed into law by President Obama in February 2009. Here is the White House page devoted to its implementation and the transparency page devoted to tracking the money.  This Wikipedia article outlines its legislative history and provisions.

2008 The Emergency Economic Stabilization Act was signed into law by President George W. Bush on October 3, 2008.

The Troubled Asset Relief Program (TARP), was a key element. You can find the U.S, Treasury Department's assessment of TARP here; this wikipedia article summarises some of the issues debated.

FinancialStability.gov is the official government site providing information and data related to the 2008 Emergency Economic Stabilization Act (EESA) & Troubled Asset Relief Program (TARP).  You can track the implementation, disbursement of funds and returns.

Other elements in the Treasury's four pronged  approach in 2008 included:

  • Capital Assistance Program 

  • Consumer and Small Business Lending Initiative((including the expansion of TALF (Term Asset-Backed Securities Loan Facility) to $1 trillion) 
  • Making Home Affordable Program   - its    -   -   -
  • PPIP (Public-Private Investment Partnership) 

Budgets

The Office of Management and Budget offers details of  previous Budgets and the proposed 2012 budget.

 

 

 

 

 

 

 

 

 

Originally produced by Dr. Deidre Shay Kamlani June 2009 and updated September 16 by Elaine Capizzi