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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.
Praise for The New Financial Deal
"While we wait and wonder what the true denouement of the Dodd-Frank Act will be, we are blessed with Professor David Skeel's timely, informative, and lucid explanation of the ins and outs of the new law. For readers trying to understand what Dodd-Frank will likely mean for Wall Street's futureand for oursSkeel skillfully dissects the Act's nuances and intricacies and provides regulators a road map for how to make sure Wall Street doesn't double-cross us again anytime soon. It's a must-read."
From the Introduction by William D. Cohan, bestselling author of House of Cards and The Last Tycoons and an upcoming title on Goldman Sachs to be published in 2011
"The New Financial Deal is mandatory reading for all those interested in the financial markets and the global economy. David Skeel is to be commended for casting sunlight, the best disinfectant, on the events preceding the enactment of the Dodd-Frank reform, its efficacy, and thepotential consequences, intended and unintended."
From the Foreword by Harvey R. Miller, Senior Partner at Weil, Gotshal & Manges LLP and the lead bankruptcy attorney for Lehman Brothers Holdings Inc., et al.
"In this work, David Skeel leads us through the most important elements of the complex 2,300 page Dodd-Frank Act, not just making its principal elements clear but also providing us with his own, invariably balanced, judgments. Readers might not agree with his every view, but will not be in doubt about why and how he got there."
Peter J. Wallison, Arthur F. Burns Fellow in Financial Policy Studies, American Enterprise Institute
An excellent book which give the reader a detailed understanding of the financial crisis, the government's responses, and where we should go in the future. Read morePublished 5 months ago by Larry
I liked reading this book. It gives new ideas to a man with no financial deal. Written well. I like the bookPublished 23 months ago by Subramaniam Ganesan
This is perhaps the "serious person's" version of the new book by David Stockman, making some of the same arguments against bailouts (which are still likely to occur even after... Read morePublished on April 1, 2013 by James T. Ranney
David Skeel, a bankruptcy expert at UPenn Law, explains everything you wanted to know about the Dodd-Frank Act and why he does not think it will solve the problems of 2008. Read morePublished on January 14, 2013 by Christopher D. Hampson
In trying to understand why the government decided to abandon the time-proven rules governing bankruptcy, I purchased this book. Read morePublished on November 25, 2011 by CuriousOne
This is patently ridiculous given that the book is available directly from Amazon for far less: The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended)... Read morePublished on July 7, 2011 by K. G. Flippin
Skeel clearly elucidates what the new law does and does not do. In his view, the law's main benefit is the new Consumer Finance Protection Bureau. Read morePublished on May 15, 2011 by Maria
The book proposes to let the states declare bankruptcy and so escape their obligations to pay the pensions of public-school teachers, state-university professors, cops, firemen,... Read morePublished on January 30, 2011 by Kevin Cahill