Our latest SPERI Paper, published today, looks at how the US system of financial regulation has come under increased criticism in the aftermath of the 2008 economic crisis. As the crisis deepened, regulatory reform became a political necessity but no consensus existed on what direction reform should take. In 2010, after a long political battle, the US Congress passed the Dodd-Frank Act. This paper examines how the bill took the form it did and, in particular, how the creation of a federal agency
dedicated to consumer financial protection – one of the most, if not the most, controversial of reform ideas floating around – became one of its main elements. The author, Basak Kus, argues that the outcomes in question were driven by the way the institutional policy-making structure related to deep divisions between actors in the financial sector.