Some view that Dodd-Frank eliminated the too-big-to-fail problem. How did it achieve this?

Question

Quizplus · Accepted Answer

Dodd-Frank established the Orderly Liquidation Authority, which allows failed financial institutions to go through an orderly bankruptcy process instead of being bailed out by the Federal Reserve. This made it much harder for large institutions to rely on government bailouts and therefore reduced the too-big-to-fail problem. The Volcker Rule and the regulation of SIFIs are also important provisions of Dodd-Frank, but they do not directly relate to the elimination of the too-big-to-fail problem.

Some View That Dodd-Frank Eliminated the Too-Big-To-Fail Problem