Persistent Leadership: Presidents and the Evolution of U.S. Financial Reform, 1970‐2007

Abstract

Between 1970 and 2007, presidents of both parties consistently and actively supported financial deregulation. Given the low visibility and relatively technical nature of the issues, presidents saw deregulation as the best way to respond to technical innovation in the industry and disruptions caused by inflation. This history suggests several lessons for students of the role of presidents in policy making. Presidents can be active in promoting policy reform even though standard methods for defining the presidential agenda do not reveal this fact. 14. Edwards and Barrett (2000) report that presidential initiatives became law about 42% of the time; Peterson (1990) estimates that presidents are "dominant" in policy only about 19% of the time (157); Rudalevige (2002) reports that presidents win approval for slightly less than 30% of their proposals.

Constructing the Governance of American Finance: Timing and the Creation of the SEC, OTS, and CFPB

“…Regulations imposed ceilings on interest rates that could be paid on time and checking deposits. 60 In 1955, the thrift regulatory agency (the Federal Home Loan Bank Board) was established from its predecessor as an independent agency. Even aft er the restrictions on interest payments were extended to cover thrift institutions and credit unions in 1966, these institutions held an advantage insofar as they could pay a higher rate of interest than their competitors.…”

After Dodd-Frank

“…The growing importance of intellectual resources in the politics of financial reform was one of many changes that appeared as inflation emerged in the 1970s and technologies evolved in subsequent decades. 25 Volatility in market interest rates led to new kinds of financial products, which in turn led to a steady increase in the size of the financial services, relative to the rest of the economy and in absolute terms. 26 Along with its dramatic growth, however, the financial services industry became far more heterogeneous and politically less coherent.…”

Dissecting Saving Dynamics: Measuring Wealth, Precautionary, and Credit Effects

“…2 We find a statistically significant and economically important role for all three explanatory variables. The trend decline in saving between the mid-1970s and 2007 is explained by the continual easing of credit availability during the period of gradual financial deregulation that began in the Carter administration (see Woolley (2012) for the history) and extended to the brink of the Great Recession. Our measure of credit supply (based on the Fed's Survey of Senior Loan Officers) shows a substantial tightening during the Great Recession, the first sustained curtailment since the 1970s.…”