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The Cost of Dodd-Frank Act for Commercial Banks

Author

Listed:
  • Darik Cruz

    (Universidad de Puerto Rico Mayagüez, USA,)

  • Miguel Vicens Feliberty

    (Western New Mexico University, USA.)

Abstract

The intent of this article is to explain how the Dodd-Frank Act impacts banks and puts a spotlight on the cost of this Act to financial institutions, especially small banks. As part of the discussion, federal agencies are described as the regulators in charge of supervising strict compliance and adherence to the applicable law. Through our research it is apparent that part of the reporting costs is transferred to the consumers in different fees and charges, which impacts the bank’s competitiveness. We depart from the premise that large banks could transfer these costs to consumers easier, because they have a critical mass of clients and products, enough to cover the additional expenses incurred when conforming with the regulation. Additionally, we analyze the cost of implementation from perspective of size which shows a substantial difference to institutions of various sizes. We conclude the paper recommending additional research and primary data collection that could contribute to a better understanding of the cost of the Dodd-Frank Act.

Suggested Citation

  • Darik Cruz & Miguel Vicens Feliberty, 2023. "The Cost of Dodd-Frank Act for Commercial Banks," International Journal of Economics and Financial Issues, Econjournals, vol. 13(5), pages 15-20, September.
  • Handle: RePEc:eco:journ1:2023-05-3
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    References listed on IDEAS

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    1. repec:aei:rpaper:37706 is not listed on IDEAS
    2. Adrien Alvero & Mr. Sakai Ando & Kairong Xiao, 2022. "Watch What They Do, Not What They Say: Estimating Regulatory Costs from Revealed Preferences," IMF Working Papers 2022/041, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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      More about this item

      Keywords

      Government; Financial Crisis; Finance Banking; Regulation;
      All these keywords.

      JEL classification:

      • H0 - Public Economics - - General
      • H5 - Public Economics - - National Government Expenditures and Related Policies
      • H6 - Public Economics - - National Budget, Deficit, and Debt
      • K20 - Law and Economics - - Regulation and Business Law - - - General
      • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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