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Allan Meltzer, Ph.D., American Economist, Senior Fellow, Hoover Institute, and author of a three-volume history of the Federal Reserve, explains that banks have been turned into public utilities, and there’s too much emphasis on near-term actions. He posits that the Dodd-Frank Wall Street Reform Act in 2010 added even more regulations to a heavily regulated industry, transferring decisions about risk for the bankers to the regulators. Meltzer divulges that the best incentive is to avoid loss in the first place, and Federal Reserve bank examiners in all major banks failed to regulate by not rejecting even one loan.
