“Days after the 2008 collapse of Bear Sterns, presidential candidate Barack Obama spoke at Cooper Union, in its famed Great Hall, laying out his ideas for a new financial regulatory framework. The deregulation that had swept through the industry in the 1990s had removed the guardrails on the largest institutions and put taxpayers at risk, he said. It was now time to consider serious reforms, not a throwback to Depression-era laws but an approach that mirrored the complexity of the times, especially as a crisis drew nearer.

“It would be one of two speeches Obama gave in New York that provided the blueprint for what eventually would become the Dodd-Frank Act. He called then for higher capital requirements for the biggest, most complex banks, and advocated finding a new way to manage firms’ liquidity risks. The Federal Reserve, he said, should have supervisory authority over any institution to which it was forced to act as lender of last resort. A financial markets oversight committee should be established to catch threats missed by individual agencies. And U.S. financial regulators should work closely with their counterparts overseas.

“It’s doubtful that any presidential candidate had ever uttered the words “Basel Committee” in a campaign speech before. But one of Obama’s advisors, a Georgetown Law professor who had worked closely with the candidate’s policy staff during the campaign and on drafts of the speech, had slipped it in, never suspecting it would actually be used.”

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