War and Peace: Investment Banks Under Dodd-Frank

Open Access
Author:
Luo, Wei
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Stephen Ross Yeaple, Thesis Supervisor
  • David Shapiro, Honors Advisor
  • James R. Tybout, Faculty Reader
Keywords:
  • investment bank
  • Dodd Frank
  • financial reform
  • banking regulation
Abstract:
Going back to 2007, when the sudden meltdown of U.S. investment banks triggered the global financial crisis, the deregulation problem of the opaque industry was brought into the spotlight. As a compelling one of the solutions, the Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as the Dodd-Frank Act, was created to change the financial landscape by improving banking supervision and regulation. Up to date, the Dodd-frank Act has been around for three years. Has it effectively prevented banks from gambling with depositors’ money? Have investment banks increased liquidity and decreased leverage? To answer the questions, this paper examines and compares the risk management of banks before, in and after the 2007-2009 financial crisis.