Summary

Chapter Eight is primarily a criticism of the regulations introduced after the 2008 economic collapse and briefly the author’s view of a more effective regulatory system. Cohan notes that following that event, the American people were extremely angry at Wall Street and resentful of the federal bailout provided to its largest banks. Accordingly, world leaders, including President Obama, vowed that a similar crisis would never occur again. However, Cohan argues that the resulting banking regulations are too restrictive and prevent banks from powering a strong economic recovery, leading to the relatively low levels of current economic growth. He is particularly critical of elements of the 2010 Dodd-Frank Act. The Volcker Rule, for example, limits what type investments banks can make and what percentage of their assets they are allowed to lend out. Living wills and stress tests, both designed to prepare banks to weather crises...