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 Four years ago Congress passed the Dodd-Frank Wall Street Reform Act.
   The most obvious problem with the act is the the name. Dodd-Frank was never a reform bill.

   It was never intended to reform the corrupt, dysfunctional casino that is Wall Street. It's purpose was always to merely regulate the corrupt, dysfunctional casino that is Wall Street.

  Even on that limited level, of bringing the festering corruption under regulation, Dodd-Frank has failed.

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   One way to measure the failure of Dodd-Frank after four years is to see how well the regulations have been carried out. Unfortunately, that is impossible because half of the rules haven't even been written.

 As of April 1, only 52% of the 398 rules mandated by the law have been completed, according to law firm Davis Polk & Wardwell LLP.
 Now you might be thinking that it should only take another 3 years or so and we will finally see how Dodd-Frank looks like, but you would be wrong. Why? Because implementation of these rules often don't kick in for up to a decade later.
 Why is the writing of the rules taking so long? There are several reasons, but the biggest reason starts in the House.
 “Occasionally we have been accused of trying to undermine aspects of Dodd-Frank,” Hensarling said with a chuckle. “I hope we’re guilty of it.”
 Hensarling we are talking about here is Texas Republican Rep. Jeb Hensarling, the committee chairman of the House Financial Services Committee.
   Hensarling is just one of what the Center for Public Integrity refers to as a "banking caucus". While you can be forgiving for thinking they are all Republicans, the fact is that there are plenty of Democrats in the pockets of Wall Street bankers.
 Almost four years after Dodd-Frank became law, community banks face lower capital standards than originally proposed and are therefore more likely to fail; fewer derivatives traders have to register with regulators, and they face lower hurdles in booking trades than they otherwise would have, partly undermining the law’s aim to make this corner of the financial system more transparent; and big banks may soon have a green light to keep investing in potentially risky securities that regulators tried to limit.
 Even before Dodd-Frank was passed, the banking industry managed to insert key exceptions into the bill, by spending over $1 Billion in lobbying efforts.
   Through this massive tidal wave of money they managed to gut Dodd-Frank.
Those costly efforts “watered down” the Volcker Rule’s limits on banks taking risks in the investment business, preserved a loophole for derivatives trading and retained the “too-big-to-fail” orthodoxy that forces taxpayers to bail out gigantic financial institutions when they play fast and loose with other people’s money.
 And that was only the start. Remember those rules they are still writing four years later? Well, guess what sort of access all that money gets to buy?
 By 2013, a bevy of banks, private equity firms, law firms and trade associations were, according to another Sunlight Foundation analysis, present at 90 percent of the Fed’s meetings, at 82.7 percent of those held by the Treasury Department and at 74.8 percent of the meetings held at the CFTC. And “pro-reform” groups? They were present at 13.7 percent of Treasury’s get-togethers, at 3.3 percent of the Fed’s meetings and reform advocates sat in on just 4.4 percent of the CFTC’s meetings concerned with, among other things, the exotic financial instruments and dangerous derivatives trading that catalyzed the crash of 2008.
 The section of Dodd-Frank that was supposed to reform Wall Street's "heads-I-win-tails-you-lose" risk compensation is stuck in bureaucratic limbo. Even the original act was shot full of so many loopholes that it is nearly useless.

  Don't be mistaken into thinking that the only problems with Dodd-Frank are political. Most of the problems with the act are structural.
   The biggest problem being the fact Dodd-Frank was specifically structured as that the regulators would design the rules. The very same regulators that completely failed at enforcing the existing rules before 2008.

  Another structural problem of Dodd-Frank is that it is all regulation without reform. It places thousands of rules upon banks, regardless of size. Thus the regulatory burden on large banks is much smaller than the burden it places on small banks.

Why is this important?

   The effect of the 2008 economic crisis was as devastating as a world war.
   The primary cause of this was Too-Big-To-Fail banks.

  The reason they became Too-Big-To-Fail was the repeal of Glass-Steagall.

 Glass-Steagall, passed in 1933, wasn't a regulator bill like Dodd-Frank. It was a reform bill because it changed the way Wall Street did business in just 37 pages. (As opposed to Dodd-Frank's 828 pages, plus tens of thousand of pages of rules.)
   Given the choice of reforming Wall Street and regulating it, Congress decided to preserve the status quo.

   The concentration of banking in America was already a huge issue before the crisis, and it has only gotten more concentrated since.

  This concentration is most obvious in the area of derivatives, the financial instruments that brought on the crisis.
   And speaking of crisis, the delay of implementing this weak-tea of a law called Dodd-Frank is putting the global economy at risk again.
  So the following statistic, contained in the report, should be of concern: high yield issuance among US corporates – junk debt in other words – over the past three years is more than double the amount recorded in the three years prior to the crisis.
   What’s more, the trend is accelerating; gross issuance of high yield corporate bonds stood at a record $378bn (£225bn) last year. There were also $455bn of institutional leveraged loans issued in 2013, far exceeding the previous high in 2007, just ahead of the crisis.
 At this point I should point out that you probably have the wrong impression of what the big banks actually do. You think their business is to take deposits and make loans, right?
  Wrong.
Mega-banks assert that they actually lose money on small deposits, and while we shouldn’t take this claim too seriously, it’s clear that deposits are not their primary concern...
 Loans to businesses represent just 11.5 percent of bank balance sheets, according to the St. Louis Federal Reserve. Loans to small businesses have shrunk for years. And overall bank lending to individuals and businesses remains stuck below 2008 levels.
  Banks don’t even lend much anymore to each other to cover short-term transaction needs, once a major function.
 So if banks aren't taking deposits and making loans, what do they actually do?
 This easy cash sustains the real profit model for today’s mega-banks: speculation. Trading revenue at investment banks like Morgan Stanley and Goldman Sachs account for a far higher proportion of revenues than traditional investment bank activities like raising money for new businesses. And the biggest five mega-banks hold over 90 percent of all contracts in the $700 trillion market for derivatives, the second-order bets that accelerated and magnified the financial crisis. In effect, the “arbitrage” opportunities to capture risk-free money funds the speculative trading, where the real money lies.
 Instead of fixing these problems we continue to throw money at it. Unfortunately, that's how we got into the mess in the first place.
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