Avoiding another big financial crisis



While the politics are treacherous, the next president cannot avoid financial reform, so the candidates shouldn’t avoid the topic during the campaign, writes Hutchins Center on Fiscal and Monetary Policy Director and Brookings Senior Fellow David Wessel. He suggests that candidates take a close look at what Dodd-Frank and the Consumer Protection Act of 2010 have accomplished, what U.S. and global financial regulators have completed, and then decide what needs to be changed to shield the nation and the rest of the world from another financial meltdown.

“To many politicians and voters, matters of financial stability are mind-numbingly complex. But we learned the hard way in 2008-09 what happens when we neglect this sphere of public policy or leave it entirely to technocrats in competing fiefdoms. Candidates will have different views on the shape and form of financial regulation. Some will want stricter, more intrusive regulation; others will want to strengthen the banks’ financial footings and let them figure out how to run their businesses. Candidates owe it to voters to consider these issues seriously enough to describe their approaches and their stance on the big questions,” he concludes.