Sen. David Vitter (R-La.) said in a Tuesday editorial that Dodd-Frank has not ended taxpayer-funded bailouts and has only led to more confusing regulations that add costs to regional banks.
“A little more than two years ago President Obama signed the Dodd-Frank bill, promising to end taxpayer-funded bailouts,” Vitter wrote, the Wall Street Journal reports. “Of course there is no such end in sight.
“Instead Dodd-Frank has had two main effects. It has solidified the crony-capitalism practice of the government picking winners and losers, and it has unleashed an avalanche of confusing, sometimes conflicting regulations on everyone, including community and regional banks—regulations that add plenty of costs but little protection.”
Vitter said that the financial reform that is most needed is more systemic. The core structure of the market must be reformed, he said, to enhance financial stability.
“We should start by increasing capital standards for megabanks: Bank of America, Citigroup, Wells Fargo, JP Morgan, Morgan Stanley and Goldman Sachs,” Vitter wrote, according to the Wall Street Journal.
Vitter added that despite the authority given to them by Dodd-Frank, regulators have refused to use it.
“I’m concerned that instead they’re relying on the next group of “smartest guys in the room” to get it right in the next financial crisis,” Vitter wrote, the Wall Street Journal reports.