Below is the Introduction to the report. Read the full report here.
Financial Reform Lessons (Un)Learned and the Coming Crash
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Wall Street Reform Law”) was signed 15 years ago, on July 21, 2010, less than two years after the devastating 2008 financial crisis (“2008 Crash”).
It is important to remember that the 2008 Crash was an avoidable man-made financial crash and disaster that, as detailed below, ruined the lives of tens of millions of Americans, grievously damaged our economy and financial system, ballooned the country’s debt, and undermined the pillars of our democracy (which depends on an economy delivering rising living standards and broad based prosperity). It didn’t have to happen and only happened because too many elected officials, policymakers, regulators, and others who should have known better listened to the financial industry’s Siren song of deregulation, which, as in the Greek myth, inevitably resulted in a catastrophic crash. The overriding lesson that should be learned and guide the road ahead is to reject that baseless and misleading but appealing song, which the industry is singing again, and which will lead to an even more horrific result, in part because the country does not have the fiscal or monetary capacity to properly respond to another financial and economic crash.
The key to understanding the severity of this threat to the country is recognizing and admitting that too-big-to-fail, too-big-to-manage, too- big-to-jail, and too-big-to-regulate financial institutions remain alive, well, and getting much worse due to the deregulation juggernaut unleashed by the Trump administration. Like the existential threats posed to smaller countries like Iceland and Switzerland from their similarly dangerous institutions, these gigantic, sprawling, complex, highly leveraged, undercapitalized, interconnected, opaque, and global institutions are likely too-big-to-bail even in the U.S. given the fiscal, monetary, and political constraints.
Those financial giants clearly cannot be resolved without destabilizing contagion and bailouts, as proved beyond doubt by the inability of the U.S. government to resolve the three much smaller banks that failed in 2023, the largest of which only had about $200 billion in assets. In stark and disturbing contrast, the 15 largest U.S. banks held a combined $14 trillion in assets as of March 31, 2025, with JPMorgan Chase having $3.64 trillion in assets; Bank of America with $2.26 trillion; Citigroup with $1.76 trillion; and Wells Fargo with $1.71 trillion. Because everyone knows (even if many won’t admit) that those megabanks cannot be resolved individually or collectively in an orderly fashion without contagion, regulators have tried to varying degrees over the years to increase their resilience in the event of inevitable stressful situations that will threaten their viability. Engaging in massive deregulation that significantly reduces the resilience of these megabanks knowing that they cannot be resolved virtually guarantees that the next crash will be much worse than the 2008 Crash and could well cause a second Great Depression.
That catastrophe will have been as avoidable as the 2008 Crash, and for similar reasons. As evidenced by the years-long massive deregulation of the financial industry that directly led to the devastating 2008 Crash—which cost the U.S. more than $20 trillion and resulted in a lost generation of Americans— Washington’s policymaking had been hijacked by special interests to serve the financial industry, not Main Street families. The goals of that reform law included consumer and investor protections, ending bailouts by ending the threat of too-big-to-fail, and refocusing the financial system on supporting the real productive economy. Achieving those vital goals required that the financial industry be re-regulated so that it would never again threaten Main Street Americans’ jobs, homes, savings, retirements, and so much more.
That should result in an economy that works for everyone, and produces broad-based economic growth, increases living standards, and closes the wealth and income gaps that are destroying the American Dream for far too many Americans. However, those goals require a strong, stable, well-regulated, and well- policed financial system that supports the real productive economy and is focused on wealth creation rather than wealth extraction. Only that will result in economic opportunity, security, and prosperity for all Americans, and protect and promote Americans’ jobs, homes, savings, retirements, and more.
Read the full report here.
