Bloomberg asks on the one-year anniversary of Dodd-Frank “what has it accomplished?”

Consumer advocates, many congressional Democrats and some economists say banks are still too big, the derivatives market remains untamed and opaque, and regulators have been slow to write hundreds of rules. The financial industry and Republican lawmakers, on the other hand, say regulators have gone overboard, hobbling financial firms with onerous demands, creating regulatory uncertainty and slowing the economic recovery.

In previous posts, I have characterized Dodd-Frank as an archetypal black swan piece of legislation. Black swan legislation is usually rushed through to passage, citing an urgent need to solve a problem; yet, it takes an inordinate amount of time to actually implement.

The passage, which notes that we should be patient waiting for Dodd-Frank to kick in, is rich, and proves several of my points:

There are two problems with these views. First, regulators can’t be moving both too hastily and too cautiously. And second, such perorations seem to forget that, less than three years ago, the financial system almost buckled under the weight of worthless mortgages, and the country narrowly avoided another Great Depression. Regulators had been blind to the credit boom and bust; banks took huge risks that exploited regulatory gaps. Today, the economy remains weak, not because of overzealous regulators but because of the lingering fallout of the financial crisis. Fixing all of this will take more than a year, and is bound to rile financial institutions because, well, it was meant to.

First, regulators can’t be too hasty, but Congress sure as hell can, rushing through legislation with hundreds of rule-makings, with no clue what will ultimately be inside the bill.

Second, the article proves the point how the financial meltdown was a black swan–the regulators (the same regulators who are writing this current piece of legislation) were “blind.” What makes you think they won’t be blind to the next mess?

Third, after this legislation, little has changed, Fixing it will take quite some time, but good thing we rushed this legislation through.

In an earlier, post, Professor Bainbridge is not so persuaded about Dodd-Frank’s efficacy:

The FDIC would like us to believe that Dodd-Frank would have prevented the financial crisis. David Skeel slapsthat idea down rather convincingly in 3 short paragraphs, which ought to tell you something about the report by itself.