The Myth That Regulation Can Stop Financial Crises

Regulation doesn’t prevent financial crises—a fact that the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act conveniently ignored.

Born from the myth that deregulated markets caused the 2008 crisis, Dodd-Frank inserts the federal government into virtually all components of the financial sector. The legislation polices everything from derivatives markets to payday lending, and it has (so far) burdened the U.S. economy with thousands of pages of rules.

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