Dodd-Frank avoided structural separation of banking from speculative trading

Evidence

The financial reform bill survived the first phase of the 4D strategy but was scaled back in the defanging phase. When major banks merge their deposit and trading functions, risky, speculative trading can incur huge debts, threatening the collapse of the financial system. Structural financial reforms separate safe deposit services from risky trading operations (as did the Glass-Steagall Act), or devise ways of limiting negative effects of the speculative trading sector on the deposit sector. The Dodd-Frank reform bill did not institute structural changes in the financial industry. It left things pretty much as they were, but with more oversight and regulation of industry practices. It also provided some new consumer protections. Paul Krugman (2009) considered these remedies insufficient against the magnitude of the financial crisis. — Albert Bandura, Moral Disengagement, 1533

Categorization

• XREF: Connects to the broader moral disengagement ‘4D strategy’ framework introduced earlier in this book, showing financial deregulation as a concrete application.