Banks in the US have added an additional $700 billion worth of capital to their balance sheets since the implementation of Dodd-Frank, according to an official at the Treasury.
US secretary of the Treasury, Jack Lew, released a statement on the six-year anniversary of the enactment of Dodd-Frank law, explaining the additional $700 billion of capital significantly helped “strengthen balance sheets.”
He praised the Wall Street reform for making the US financial system “safer and sounder.”
Dodd-Frank has also “pulled derivatives out of the shadows,” with standardised rules ensuring derivatives are centrally cleared and traded transparently, Lew explained.
The secretary acknowledged the US financial system had been “tested” repeatedly – particularly over the past year – but it had “demonstrated resilience”.
Lew said the tests provided “fresh evidence that Wall Street reform is working and that with deeper capital, greater transparency, and detailed resolution plans, it can withstand far greater shocks than before the crisis.”
The financial industry must not become complacent, “Wall Street Reform was not simply an accomplishment to celebrate, but a commitment to keep,” Lew concluded.