President Barack Obama on Wednesday signed into law the bill to rewrite the nation’s financial rules.
The legislation grants broad new powers to federal watchdogs and places great faith in them to prevent another crisis.
The Dodd-Frank Wall Street Reform and Consumer Protection Act closely resembles the blueprint unveiled by the administration in June 2009. It establishes an independent consumer bureau within the Federal Reserve to protect borrowers against abuses in mortgage, credit card and some other types of lending.
It grants the government new authority to seize and wind down large, troubled financial firms such as the failed investment bank Lehman Brothers and sets up a council of federal regulators to monitor threats to the financial system.
It mandates oversight of the vast market for derivatives complex financial instruments that helped fuel the crisis and gives shareholders more say on how corporate executives are paid.
But it stops short of breaking up the nation’s megabanks, it leaves out a ban on trading certain derivatives, and it doesn't set firm limits on executive pay.
After signing the bill with 11 different pens, Obama said, “It’s done.” But really, it’s only beginning.
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