And in response to greater public scrutiny, that has meant committing a lot more money and resources to comply with a host of regulatory requirements.
The collapse of Lehman Brothers had little to do with how well, or poorly, the firm followed the rules. But the public outrage over the government’s failure to oversee financial institutions has created a much tougher regulatory environment in which companies cannot afford to fall short.
The Dodd-Frank Act was adopted in 2010 to address inadequate oversight and regulation of the financial markets. It was heralded as a means to preclude government bailouts of “too big to fail” banks.
But many of the rules mandated by the law have yet to be adopted as the Securities and Exchange Commission and the Commodity Futures Trading Commission are bogged down in figuring out exactly how to regulate financial products like derivatives and money market funds.
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image: © Clyde Robinson