From the Inside Flap
After watching the government bail out Bear Stearns and AIG in 2008, and pump well over one hundred billion dollars into Citigroup, Bank of America, and the other largest banks the same year, Americans realized that the existing regulatory framework did not work. The Dodd-Frank Act, which President Obama signed into law in July 2010, was Washington's answer. The legislation created an entirely new set of rules for both the instruments and the institutions of contemporary finance. Although the reforms were desperately needed, they were drafted by the same people who designed the bailouts of 2008, and it shows.
In The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended) Consequences, David Skeel explains where the legislation came from, tracing its assumptions back to the 2008 crisis and offering an inside account of the key moments in the legislative process. He analyzes each of the main components of the Dodd-Frank Act, explaining how they will work and showing that the new regulatory framework depends on precisely the qualities that Americans found so offensive about the bailouts of 2008: special treatment of the largest financial institutions and ad hoc intervention in the event of trouble. Skeel's assessment is not entirely pessimistic, however. He argues that a few features of the Dodd-Frank Act are genuine improvements, such as its regulation of financial derivatives, and he outlines several simple bankruptcy reforms that would curb the worst excesses of the new partnership between the government and the largest financial institutions.
From the Back Cover
Praise for The New Financial Deal
"While we wait and wonder what the true denouement of theDodd-Frank Act will be, we are blessed with Professor David Skeel'stimely, informative, and lucid explanation of the ins and outs ofthe new law. For readers trying to understand what Dodd-Frank willlikely mean for Wall Street's futureand for oursSkeelskillfully dissects the Act's nuances and intricacies and providesregulators a road map for how to make sure Wall Street doesn'tdouble-cross us again anytime soon. It's a must-read."
From the Introduction by William D. Cohan, bestselling authorof House of Cards and The Last Tycoons and an upcoming title onGoldman Sachs to be published in 2011
"The New Financial Deal is mandatory reading for all thoseinterested in the financial markets and the global economy. DavidSkeel is to be commended for casting sunlight, the bestdisinfectant, on the events preceding the enactment of theDodd-Frank reform, its efficacy, and thepotential consequences,intended and unintended."
From the Foreword by Harvey R. Miller, Senior Partner atWeil, Gotshal & Manges LLP and the lead bankruptcy attorney forLehman Brothers Holdings Inc., et al.
"In this work, David Skeel leads us through the most importantelements of the complex 2,300 page Dodd-Frank Act, not just makingits principal elements clear but also providing us with his own,invariably balanced, judgments. Readers might not agree with hisevery view, but will not be in doubt about why and how he gotthere."
Peter J. Wallison, Arthur F. Burns Fellow in Financial PolicyStudies, American Enterprise Institute