Dodd-Frank reaps editorial praise

{mosads}“New regulations, properly implemented and enforced, will crimp the banks’ profitability,” the paper wrote. “But that is not a sign they are defective — just the opposite. It shows that the rules are beginning to work as intended to rein in destructive products and practices that inflated the bubble, led to the crash and necessitated the bailouts.”

The pieces represent a bit of good news for the law, which has been a partisan battleground ever since Republicans gained clout on Capitol Hill at the beginning of this year.

Republicans have taken every opportunity to blast the Wall Street overhaul as overbroad, overcomplicated and harmful to the nation’s economy. Bills in both chambers have been introduced to repeal the law, and House Republicans are pushing a series of smaller bills that repeal, weaken or otherwise tweak a number of its provisions.

And conservative lawmakers are looking to further influence the law by pushing smaller budgets for regulators charged with implementing it, and blocking a number of nominees tapped by the White House to run key agencies, such as the new Consumer Financial Protection Bureau.

GOP presidential hopeful Newt Gingrich took things a step further, calling for the law’s primary authors, retired Sen. Chris Dodd (D-Conn.) and soon-to-be-retired Rep. Barney Frank (D-Mass.) to be imprisoned.

In the Bloomberg editorial, it acknowledges that some of the law’s new rules will be “unnecessarily burdensome,” and there are some market areas the law fails to address, such as high-frequency trading and money-market mutual funds.

But overall, the law represents a key series of firewalls designed to avert the widespread crisis that engulfed the financial system in the fall of 2008, Bloomberg wrote. Bank stress tests and heightened information reporting reduce the chance of another crisis, while higher capital requirements help banks weather problems if they do emerge. And a third level of protection is aimed at allowing a financial institution to collapse without endangering the entire financial system.

Some of the areas of the law that have received the most criticism, Bloomberg argued, are the ones that are “potentially bad for bonuses … [but] promise the greatest net gain for the broader economy.”

The Times argued that New York should spend less time complaining about how heightened regulations are stifling the financial sector, and more time looking at ways to diversify economic activity beyond the titans of Wall Street.

“There is no disputing that developing more and different status jobs would be better for New York, and the rest of the country, than fighting financial reform,” the paper wrote.