Süddeutsche Zeitung, the International Consortium of Investigative Journalists, and other worldwide news agencies recently reported an enormous leak from a Panama-based law firm, Mossack Fonseca. This unprecedented leak unveils a mere link in the chain in the global network of exploitative, offshore tax empires. According to a 2016 report from The Guardian, Mossack Fonseca is the fourth largest offshore law firm that administers over 200,000 offshore shell companies managing expenses of wealthy individuals in at least 80 regions all over the world. After one year of examination, the 1.5 million document leak (containing 2.6 Terabytes of internal data) reveals transactions dating back to the late 1980s and exposes a convoluted trail of transactions that legitimized waves of terrorism in the Middle East, facilitated a global network of child-sex slavery and even empowered despots worldwide.

This exposure has compelled both supporters and adversaries of the offshore banking industry to challenge the legitimacy of arcane offshore structures that conceal avenues for illegitimate acts.

Origins of The Offshore Banking Industry and Legitimate Uses

The origins of the offshore banking industry trace back to Switzerland’s declaration of neutrality in 1815, which also prompted the state’s rise as a budding tax haven. During a time of economic turmoil and political strife, the well off recognized the need to secure their wealth and found that Swiss Banks satiated their demand. Today, proponents of the offshore banking industry continue to champion its ability to secure the wealth of elites from the greedy hands of insolvent government officials.

Offshore tax havens are structured in such a way that anonymity is prioritized through measures that obscure the identity of the actual beneficiary; this is possible because offshore shell companies, or subsidiaries that only function to exchange capital, are commonly used by emerging companies to skirt domestic taxes and raise funds for operation. Some offshore jurisdictions also allow for shell companies to purchase other shell companies, a common practice that creates a complex web of subsidiaries — rendering the ultimate beneficiary’s identity obscure. These measures are not illegal and can prove to be advantageous; their money is practically untraceable.

Untraceable capital is advantageous for several reasons. In The Casey Research International May 2013 report on offshore companies, Nick Giambruno argues that circumventing domestic restrictions on capital allow clients to benefit from offshore currency diversification and in turn more purchasing power, access to foreign medical-care options and access to sounder, foreign banking options. However, unchecked capital also paves the way for unchecked abuses.

The Offshore Banking Industry and Illegitimate Use

For centuries, wealthy individuals have developed an extensive network of shell companies so that vast sums of their wealth cannot be adequately repatriated for taxation. In a 2016 The Guardian report, United States economist Gabriel Zucman posits that eight percent of the world’s wealth is stashed in tax havens, resulting in the loss of approximately $200 billion a year in global tax revenues — only 20 percent of it is accounted for on tax returns. In other words, offshore entities provide the global elite with archaic privileges that unfairly exonerate them from tax avoidance and evasion. Every taxpayer that does not have access to offshore tax havens must bear the enormous tax burden, as large amounts of wealth remain hidden. In essence, the offshore banking industry codifies a tax avoidance scheme that shelters and rewards the well-off at the cost of worldwide economic inequality and widespread government deficits, especially for developing countries. Tax evasion at such a large scale stifles economic and social development, as vast amounts of wealth — that should have been collected via taxation — are siphoned away from public services in developing countries.

Moreover, the bureaucratic cavalry of attorneys, accountants and bankers heightens a wealthy individual’s sense of security, so much that he is emboldened to carry out reprehensible acts with the laundered money. According to the 2016 ICIJ report on the Panama Papers, offshore subsidiaries effectively secured capital through a secret web of transactions for terrorist organizations in the Middle East and North Africa, acquaintances of Syrian dictator Bashar al-Assad as well as 33 individuals blacklisted by the U.S. for their ties to Mexican drug lords. Hidden wealth of such actors financed violent bombing-campaigns in Syria, secured underage human trafficking in Russia and expanded North Korea’s Nuclear Weapons program. Tax havens, while advantageous for a few, validate a world of lawlessness and corruption absent of legitimate ramifications. Not only do tax havens empower unsavory actors, but they also enable such actors to carry out insidious acts on those they already financially exploit.

Panama Papers: Current Backlash of Offshore Industry

From Iceland to Chile, the Panama Papers’ exposure of corrupt government officials resulted in a worldwide outcry for transparency. Consequently, citizens all over the world have called for the resignation of heads of states, such as the prime ministers of Iceland and Pakistan. Those planning to remain in office, however, have responded to the public with possible changes in policy for offshore structures that would increase compliance with transparent measures of international financial institutions, notably through the Organisation for Economic Co-operation and Development (OECD) and Transparency International. According to the OECD 2014 report on transparency, the G20 mandated disclosure standards in over 100 worldwide jurisdictions requesting governments to collect and share detailed accounts of their financial institutions on an annual basis. Moreover, as BBC’s 2016 article reports, Panama’s non-compliance with these standards have prompted the UK, Germany, France, Italy and Spain to comply with transparent measures of sharing financial data and to draw up an international blacklist of non-compliant jurisdictions.

Those willing to flee from exposed offshore companies view this as an opportunity to flock to safer tax havens — some of which are actually located in the U.S. According to a 2016 Bloomberg Business report, several foreign trust companies, such as those in Switzerland, are migrating to U.S. jurisdictions, such as Reno, Nevada because the U.S. is not obligated to follow international tax standards of transparency.

So long as offshore companies continue to deceive transparent standards that are supposed to hold them accountable, international financial institutions supported by world leaders will continue to strive for reform or for the complete eradication of the offshore banking industry. The Panama Papers leak acts as a catalyst to a global movement intending to stop tax-haven abuse and to fairly tax trillions in unfairly hidden wealth.

Roughly two months ago, the U.S. Environmental Protection Agency (EPA) accused Volkswagen of deliberately using special software to cheat emissions tests.

According to Cynthia Giles of the EPA, since 2009, special software had been installed in over 11 million Volkswagen diesel-powered cars to pass emissions testing and to maintain the illusion that the diesel-powered vehicles were more environmentally safe than they truly were.  Chris Ziegler of The Verge reported the company’s diesel engines were performing so poorly on emissions tests that Volkswagen engineers employed special devices to efficaciously champion the appeal of diesel.  Ziegler described the devices as working by “only turning on emissions control when undergoing emissions testing, but not when the car is actually being driven normally and pollution is at its peak.”  According to Aaron Morrison of International Business Times, the defeat devices in the diesel cars enabled the vehicles to release from 10 to 40 times more nitrogen oxides than permitted by U.S. environmental regulations.

Volkswagen has already seen out its CEO, Martin Winkertorn, and while the scandal will have devastating effects for the company itself, the scandal will have massive repercussions for Europe and the automobile industry as a whole.

The once-lucrative Germany car company now faces catastrophic financial troubles.  Volkswagen may have to pay fines of up to $18 billion, with civil penalties accumulating to roughly $37,500 on each vehicle, according to Timothy Gardner of Reuters.  Roughly a week after the emissions scandal surfaced, the market value of Volkswagen dropped 30 percent, Rocky Newman of Fortune Insider reported. Newman concludes that the accumulation of fines will put a “conservative estimate of the cost to Volkswagen and its shareholders in the vicinity of at least $54 billion, given fines outside the U.S. and lost sales that result from the scandal.”

The financial burden may not be limited to Volkswagen.  The revelation of Volkswagen’s use of special software to beat emissions tests will likely prompt stricter oversight of all automakers and emissions testing processes.  Greg Archer, a former UK government adviser, claims there is “lots of anecdotal evidence about the use of defeat devices to disguise environmental impacts and that the scandal could spread beyond diesel and into Europe, where tests are more prone to abuse.”  Evidently, Volkswagen may be representative of a larger problem within the automaker industry and emissions testing.

The implications of Volkswagen’s emissions scandal will extend beyond the confines of the company.  Germany and Europe as a whole will undoubtedly be affected by the crisis; the scandal’s far-reaching effects can be explained by the mere size and reach of Volkswagen.  The automaker employs over a quarter million Germans alone.  According to Kevin Roose of Fusion, Volkswagen cars “account for one of every ten passenger vehicles in the world.”  In addition, Germany has the largest economy of any European country, and relies heavily on exports with approximately 45 percent of the country’s total gross domestic product coming from exports.  Given the EPA’s fine that could amount to over 18 billion, Volkswagen will undoubtedly have to make employment and salary cuts that will heavily damage the export-based Germany economy.

Prior to Volkswagen’s scandal, diesel engines had been increasing in popularity in both the United States and Europe.  After all, many of diesel’s benefits over gasoline are indisputable:  according to Allen Schaeffer, director of the Diesel Technology Forum, diesel has on average “30 percent greater energy efficiency than a comparable gasoline engine.”  Volkswagen had been persistently advertising the notion of clean diesel in the United States with notable success.  During the first half of 2015, Volkswagen overtook reigning sales leader Toyota as the sales leader for diesel vehicles.  EPA’s revelation in early September will likely halt the automaker’s progress, however.

Opinions regarding diesel vehicles have already reversed following the scandal.  According to US News, “Major European cities such as Paris and Birmingham are already calling for a crackdown on diesel and the FT has suggested that Europe, where 53 percent of 2014 engines sold used diesel, might switch “virtually overnight” to petrol.” As Leonid Bershidsky of the Bloomberg View explains, “diesel-powered vehicles popularized as a result of lower excise taxes on diesel than gasoline throughout most of Europe, and relatively loose environmental standards for diesel engines that permitted higher levels of nitrogen oxides and other unsafe particles.”

Many drawbacks of diesel fuel that were previously overlooked have come to light as a result of VW’s emissions testing scandal.  Diesel fuel is noticeably more expensive than gasoline; according to Alex Davies of Wired, the price of diesel in September was $2.501 per gallon compared to the national average of $2.289 per gallon for regular gas.  In addition, Davies claims that diesel “cars are typically several thousand dollars more expensive than the equivalent model with a gas engine, because scrubbing the exhaust gas of nitrogen oxide and other particulates takes know-how and hardware.

Now, buyers of Volkswagen diesel-powered vehicles will pay:  According to Newman, “VW owners of “clean diesel” vehicles will incur lost resale value as high as $5,000 per vehicle.”

Volkswagen’s emission scandal has and will continue to weaken support for the diesel industry.  Diesel sales were in excess of 2.4 million in 2013 for Volkswagen, accounting for a quarter of the company’s factory output, according to U.S. News.  In addition, the company had nearly twice as many diesel-powered vehicle sales as its closest competitors.  Bershidsky asserts that the scandal is “the result of Europe backing the wrong emissions-reducing technology on a regulatory level.”  The Volkswagen scandal has undoubtedly put a dent in the diesel engine industry and will prove to difficult to reverse.  As Bershidsky alleges, “There will be only two paths for them to take: making sure the emissions performance of all new diesel cars is irreproachable—which isn’t easy in the real world—or shifting production toward hybrid and electric vehicles, as Japanese companies did when they decided diesel was on its way out.” Evidently, the Volkswagen scandal may carve the way for the rise of hybrid and electric vehicles around the world; only time will tell.

Volkswagen’s emissions scandal has reverberated all over the globe.  The revelation of Volkswagen’s use of defeat device has negatively impacted not only the German economy but the European economy altogether.  In addition, the emissions-cheating scandal has devastated the company itself and will call for increasingly intense regulatory oversight on all major car companies.  Most importantly, Volkswagen’s crisis has given the hybrid and electric car industry the opportunity to rise to prominence.  Although the German-based car company with survive, Volkswagen’s scandal and the EPA’s catastrophic fine in its own should serve as noteworthy lessons to automakers around the world: Companies ultimately pay the price for their wrongdoings and should never test the boundaries of regulatory oversight.

At the end of January, the United States Federal Reserve Bank will undergo a transition, as the current Chairman of the Board of Governors, Ben Bernanke, will step down. On October 9th President Obama nominated Janet Yellen, the Vice Chair of the Board, as his choice to succeed Bernanke and lead the Fed.

While the choice of Yellen was hardly unexpected, it still raised many questions regarding what the United States and the world should expect to see as Yellen takes charge, especially as the Fed prepares to deal with the transition out of quantitative easing. Will Yellen be a radically different leader than Bernanke? Or are we likely to see large similarities in the Fed’s philosophy over the last ten years? While it’s impossible to answer these questions for sure until Yellen takes over, taking a look at her past and examining her prior stances can be helpful in making educated guesses.

Prior to her experiences at the Fed, Yellen attended Brown University, where she graduated summa cum laude in Economics. Immediately following her graduation, she enrolled in Yale’s Economics PhD program, eventually becoming a professor at Harvard University, where she taught Macroeconomics.

Yellen was appointed to the Fed’s Board of Governors in 1994 and served until 1997, when she stepped down to become the head of President Clinton’s Council of Economic Advisors. Eventually, Yellen became the President and CEO of the San Francisco branch of the Fed in 2004. She served in that position until 2010, when President Obama nominated her to succeed Donald Kohn as Vice-Chair of the Board of Governors.

The general consensus seems to be that the Fed’s policies under Yellen will likely be similar to a third Bernanke term. Yellen was deeply involved in coordinating and creating the current Fed policy with Bernanke, and there is little reason to believe that she would suddenly drastically change course.

One concern regarding Yellen that has caused some commotion is that she is considered to be very “dovish”, meaning that she is more concerned about maintaining full employment rather than about controlling inflation rates. A recent poll conducted by the Wall Street Journal of forty-two economists show that almost forty percent of them are not confident in Yellen’s ability to head off inflation above two and a half percent. The poll also asked respondents whether they thought Yellen was likely to be more hawkish or dovish than Bernanke, and again, nearly forty percent stated that they felt that Yellen’s policies would likely be more dovish.

Professor Marjorie Rose, who teaches macroeconomics at Dartmouth College, stated in an interview that she generally feels that Yellen was a strong choice to succeed Bernanke. “It would have been great to have a third Bernanke term; he is absolutely brilliant,” Professor Rose said. “But barring that possibility, I think Yellen was the solid choice from the field. She has had considerable policy experience, serving as Chairman of the Council of Economic Advisors under Clinton and then as President of the San Francisco Fed and now Fed Vice Chair. She has a keen intellect and understands policy and the economy.”

Professor Rose also noted that Yellen was going to be facing a unique challenge in taking over the Fed as it undergoes the transition out of quantitative easing.

“Even the mention of the possible tapering of QE a couple of months ago resulted in a spike in interest rates,” Professor Rose said, predicting the situation Yellen will be facing. “The Fed is in uncharted waters here.”

Despite the challenging situation, Professor Rose indicated that she believes that Yellen would be capable of handling both the policy and the politics of the position, stating, “The Fed chairman has to be thoughtful and very careful with any public statements; one misspoken phrase can send markets around the world into a tailspin, and I think Yellen has the experience and has demonstrated she knows how to handle herself.”

Out of the frying pan and into the fire.  Last month Russell Wasendorf, Sr. attempted to commit suicide via asphyxiation by using a hose to funnel the exhaust from his Chevy into the car. A Good Samaritan thwarted his attempt and saved his life.  He is currently in jail awaiting trail where he will be charged with stealing around $200 million dollars from his own clients for the past twenty years.

Within the financial world $200 million is not a particularly large amount of money.  A scandal of this magnitude, although terrible, would not normally ring many alarms, but following the Madoff Ponzi scheme and the collapse of MF Global, it has done so, and with good reason.  This outright theft, along with the more recent LIBOR fixing scandal, has, to a certain extent, confirmed the public fear that the financial industry cannot always be trusted to keep investors’ money safe. This fear is helping to fuel the current economic downturn as investors continue to lose faith and withdraw money from financial markets.  Although this doubt in the system is certainly justified and is clearly an important issue, these recent scandals also beg a more fundamental question:  Can regulators be trusted to regulate?

It is almost laughable how simply Wasendorf was able to fool U.S. regulators as he stole hundreds of millions of dollars through his futures firm Peregrine Financial Group.  The ultimate authority for regulating firms such as Peregrine resides with the U.S. Commodity Futures Trading Commission (CFTC), which, because of its limited resources, delegates most of the oversight, such as regular auditing, to the National Futures Association (NFA).  The NFA, an internal self-regulatory organization, had audited Peregrine three times since 2010 and failed to pick up on the fraud.  Even more shocking is the fact that Wasendorf was able to frustrate the NFA’s attempts to verify Peregrine’s bank statements simply by sending them forgeries.  Instead of picking up the phone or contacting the bank electronically, the NFA relied on written mail to reach Peregrine’s bank.  The only problem was that Wasendorf had provided his own P.O. box as the bank’s address.  Receiving these letters himself, Wasendorf was easily able to falsify records.  He wrote, “Using a combination of Photoshop, Excel, scanners, and both laser and ink jet printers I was able to make very convincing forgeries of nearly every document that came from the Bank.”  When the NFA finally gained enough sense to contact the bank for electronic records, they stumbled upon nearly twenty years of fraud.

Although it is clear that regulators at the CFTC and NFA cannot be blamed for this scandal, it is rather astounding just how incompetent they were at detecting it.  When this failure is seen in aggregate with the several other scandals around the financial world, doubts quickly begin to arise about nearly all regulators’ abilities to provide oversight.  They are clearly struggling to do their jobs effectively.  Blame, however, should not fall solely on their shoulders, for they are playing at a natural disadvantage, which can be seen if we consider the massive disparity in resources between the financial services industry and those organizations that regulate them.  The CFTC for example, which is one of the largest regulatory agencies in the United States, employs roughly 700 people and has a budget of about $200 million.  Goldman Sachs, on the other hand—a single bank that participates in the futures trading regulated by the CFTC—employs about 47 times as many people and has about 22 times as much spending money, with 33,000 workers and $ 4.4 billion in net income for 2011.  With this absurd discrepancy of resources in mind, it should come as no shock that regulators struggle to keep up with financial firms’ attempts to skirt regulations (both legally and illegally).

The problem is exacerbated by the fact that there is no clear solution.   Adding more resources does not seem to be a possible remedy, because of the government’s limited funds.  The U.S. cannot afford to simply throw money at this problem. Attempts to find and incentivize better regulators also run into problems because of the nature of the job.  In addition to being understaffed, regulators are also underpaid compared to those working in the financial sector. Considering this, it is not surprising that the financial industry attracts a much larger array of talented people who can do their work at a much higher level.  Even when people are at their jobs on these opposite sides of the industry, their incentives are vastly different.  A banker who exploits some sort of regulatory loophole or flat-out breaks the law stands to make millions of dollars, while a regulator who manages to do his or her work exceptionally well and stops the banker merely gets a “job well done.”

It seems obvious that regulators are struggling to do their job and provide the policing that the financial industry needs, even if it is not entirely their fault.  Although this may not be the main problem behind financial scandals, it is certainly present and fueling the flames of fraud.  If we wish to change the industry that has caused so much grief though its greed, changing the organizations that are meant to prevent this fraud may be a good place to start.

With the world’s second largest economy after the United States, China has definite potential to exert strong influence on the global economy. However, largely due to the government’s reluctance to laissez faire, it hasn’t yet fully capitalized on its clout, especially in the global financial sector. But all that may soon change, as China’s central bank chief said in early April that China may loosen overseas investment regulations for private investors.

Historically, China first voluntarily opened up to foreign trade and investment under Deng Xiaoping in 1978 with his new capitalist-inclined system that promoted market forces. Since then, China’s financial sector has undergone significant reforms but it still exhibits the legacy of a centrally- planned economy in which the government, to this day, plays an instrumental role in credit allocations and pricing of capital. In addition, the government instituted a myriad of regulations that control both foreign investment into China and Chinese investment in foreign investments. Hindered by a maze of administrative procedures, foreign investors in China have complained that the Chinese government does not allow them to compete fairly with native businesses. Chinese investors that want to invest overseas, too, are heavily limited by esoteric guidelines.

However, beginning in October of 2011, the Chinese government took a significant step toward freeing up its hold of the financial sector. The deregulations include allowing foreign companies with RBM deposits outside of China to use their offshore account to directly invest in China, and allowing direct investment overseas for private Chinese investors in Wenzhou, also known as a “general financial reform zone” experiment. The government, afraid of the volatile international financial sector, decided to allow Wenzhou–a city in China recognized as the “birthplace of China’s private economy” due to its role as leader in developing a commodity economy, household industries, and specialized markets in the early days of economic reforms–to experiment with direct investment overseas. Concerns over inflation and property risks have held back the Chinese government from allowing a larger-scale deregulation, but nonetheless the Wenzhou experiment is widely acknowledged by the international community as a significant step forward.

Besides de jure governmental regulations, there are many de facto barriers to Chinese involvement in foreign trade. The most prohibiting factor to foreign trade is not what the laws say, but rather the existence of confusing, and often conflicting, laws at all levels of government. A unitary state with 23 provinces, 5 special autonomous regions, 4 self-governing municipalities, 2 special administrative regions, and a hierarchy of departments at all levels, China has innumerable bodies with legislative and enforcement powers that can influence foreign firms’ operations. Many foreign, and even native, companies have vocalized the impossibility of navigating the Chinese bureaucracy. A common phrase in Chinese business circles is, “It’s okay since no firm is 100% in compliance with regulations.” This trend poses significant legal risk for potential foreign investors.

Another substantial barrier to investment in Chinese markets is the inability of foreign private equity firms to freely convert RBM into other currencies. In terms of entry into Chinese market, foreign entrants must obtain special permission from the Ministry of Commerce to make investment in China using foreign currency-denominated funding pools. The Ministry of Commerce, then, picks certain transactions that it considers beneficial for the country and its policies. Later, the lack of RMB convertibility means that it’s difficult for a company to get its profits out of China. Again, companies require Ministry of Commerce permission, and are subject to different regulations depending on which individual in the Ministry handled the case, and his or her interpretation of the laws. Currently, successful foreign companies in China exploit the murky financial environment by taking advantage of unpredictable legal enforcement and shady accounting through local knowledge and networks.

However gloomy and risky foreign investors view the opportunities in China, one thing is for certain: they all want a slice of the large economic pie. “The more open China is to the world, the more benefits China will get and the more competitive local industry will be,” said Li Xiaogang, director of the Foreign Investment Research Center at the Shanghai Academy of Social Sciences. Following a similar philosophy, the Chinese government has begun responding to international pressure and removing itself as the referee in the financial markets. Ironically, Chinese deregulation may eventually level out the playing field in China’s financial sector, and with foreign companies as players, all the participants may reap benefits.

On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law. Touted by the left as a remedy to Wall Street’s excess and opacity, the bill severely increases regulations on the financial industry. But is it effective? In an address to the media, Obama claimed:”The American people will never again be asked to foot the bill for Wall Street’s mistakes. From now on, every American will be empowered with clear and concise information you need to make financial decisions that are best for you.”

It has been almost a year since the act’s passage and American consumers have yet to see substantial benefits from the reform. On the flip side, however, the banking and financial industry have been hit hard by Dodd-Frank, with the numerous regulations increasing costs and cutting into profits. Clearly, there is value to transparency on Wall Street, but the cost of reform begs the question of whether Dodd-Frank is truly a worthwhile endeavor.

Within its 2,300 pages, Dodd Frank has some merit, such as calling for greater accountability in rating agencies. But Alan Greenspan, former Fed Chairman, claims that the entire reform is flawed in theory. Citing Adam Smith’s “invisible hand,” Greenspan asserts that these massive regulations will inevitably create market distortions that could have devastating effects on the economy. Believing regulators are being given too much artificial authority, Greenspan stated that, ”regulators are being entrusted with forecasting, and presumably preventing, all undesirable repercussions that might happen to a market when its regulatory conditions are importantly altered. No one has such skills.”

Greenspan’s theoretical objections to Dodd-Frank have already begun to materialize as the legislation has had unintended consequences. For instance, regulations preventing banks from placing certain charges on consumers—such as capping interchange fees at 7 cents a transaction—have caused banks to search for alternative means to charge clients. These alternate methods have included charging annual fees on debit cards and increasing ATM fees. Thus, just as Greenspan warned, regulations that distort the market can yield unpredictable consequences. In this particular example, consumers may actually be worse off, as banks are now levying more fees on consumers to account for their losses due to Dodd- Frank.

In addition to creating market distortions, Dodd-Frank fails to achieve its main purpose. Created in reaction to the 2008 Financial Crisis, the reform’s primary purpose is to prevent another potential meltdown. Yet Dodd-Frank’s insistence on consumer protection may actually be fueling another credit bubble—the underlying cause of the 2008 disaster. Regulation over the past decade has consistently resulted in the expansion of mortgage credit, which in turn created the housing bubble. While Wall Street was indeed partly at fault for the crisis, due to its proliferation of collateralized debt obligations and faulty credit ratings, government sponsored mortgage lending was the leading driver of the collapse. Supporting the subprime market through Fannie Mae and Freddie Mac, the government enabled the accumulation of high-risk loans that ultimately precipitated the meltdown. But instead of changing the government’s approach to mortgages, Dodd-Frank still maintains “government-imposed lending quotas” on banks, leading America down the same path that led to the financial crisis.

Rather than focusing on complex regulations, a simpler approach would be to address the dangers of easy credit. As demonstrated by Greenspan, the more complex economic regulations become, the more unpredictable the market becomes. While Dodd-Frank clearly attempts to aid the average American consumer, it may be doing more harm than good, while simultaneously ignoring the larger issue of credit.

The House has already voted to repeal Dodd-Frank, and GOP leaders in the Senate have introduced a repeal bill as well. However, this repeal bill has almost no chance of getting past a Democrat controlled Senate.

Regardless of what happens to the status of Dodd-Frank, it is important that policymakers know that regulation is not always the answer. In continuing to stress lending-quotas, Dodd-Frank is perpetuating a dangerous precedent that will ultimately need to be addressed.