Bad history, worse policy: How a false narrative about the financial crisis led to the Dodd-Frank Act
About This Event

Event Summary

At an event on Tuesday, panelists joined AEI's Peter Wallison and Alex Pollock to discuss Wallison's new book "Bad History, Worse Policy: How a False Narrative about the Financial Crisis Led to the Dodd-Frank Act" (AEI Press, January 2013). Wallison argued that competition in the marketplace of ideas broke down after the 2008 financial crisis, resulting in a singular narrative for reform dominated by the left. As a result, the Dodd-Frank Act inappropriately increased government oversight and regulation while ignoring the fundamental cause of the crisis: excessive government involvement in the housing sector.

Panelists praised Wallison's narrative, agreeing that by ignoring the warnings outlined in the book, regulators were doomed to repeat the failures of the past. Hester Peirce of the Mercatus Center suggested that Dodd-Frank perpetuated the problems of the last recession by codifying systematically important financial institutions. Wayne Abernanthy of the American Bankers Association noted that the sheer magnitude and complexity of implementing Dodd-Frank prevented regulators from identifying the impending financial bubble. John Allison of the Cato Institute concluded that the existing narrative of the financial crisis ignores the important role the Federal Reserve played in pumping up the housing bubble.

--Andre Gardiner

Event Description

Since the passage of the Dodd-Frank Act in 2010, US economic growth has slowed. When the Volcker Rule is finalized, state and local governments will experience increased borrowing costs. The largest financial institutions will dominate the market, with funding advantages over their smaller rivals. The adverse effects of Dodd-Frank will seriously outweigh its benefits. Why did a law with these deficiencies pass in Congress?

Peter Wallison’s new book “Bad History, Worse Policy: How a False Narrative about the Financial Crisis Led to the Dodd-Frank Act,” (AEI Press, January 2013) provides the answer: the act was based on a false narrative about the causes of the financial crisis. This book release event will examine how a mistaken view of an event leads to bad policy decisions.

Copies of Wallison’s new book will be available at the event.

If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.


11:45 AM
Registration and Buffet Lunch

12:15 PM
Peter J. Wallison, AEI

Wayne Abernathy
, American Bankers Association
John Allison, Cato Institute
Hester Peirce, Mercatus Center at George Mason University

Alex Pollock, AEI

1:45 PM
Coffee Reception and Book Signing

Event Contact Information

For more information, please contact Lori Sanders at [email protected], 202.862.7172.

Media Contact Information

For media inquiries, please contact [email protected], 202.862.5829.

Wayne A. Abernathy joined the American Bankers Association (ABA) in February 2005 and serves as executive vice president for financial institutions policy and regulatory affairs. Abernathy oversees ABA groups that deal with policy development, regulatory and compliance issues, bank general counsels, securities and investment, derivatives policy, and risk management. Before joining ABA, Abernathy served two years as treasury assistant secretary for financial institutions under President George W. Bush, receiving the Alexander Hamilton Award in recognition of his service. In that office, he was also a member of the board of directors of the Securities Investor Protection Corporation. Before his work in the treasury, Abernathy served as staff director of the Senate Banking Committee under Chairman Phil Gramm. His previous experience with the Senate Banking Committee includes serving as staff director of the Subcommittee on Securities from 1995 to 1998. From 1989 until 1994, Abernathy was a Republican economist for the committee. He previously worked as a senior legislative assistant for Senator Gramm from 1987 to 1989 and as an economist for the Banking Committee’s Subcommittee on International Finance and Monetary Policy from 1981 to 1986.
John Allison is the president and CEO of the Cato Institute. Before joining Cato, Allison was chairman and CEO of BB&T Corporation, the 10th-largest financial services holding company headquartered in the US. During his tenure as CEO from 1989 to 2008, BB&T grew from $4.5 billion to $152 billion in assets. He was recognized by the Harvard Business Review as one of the top 100 most successful CEOs in the world over the last decade. Allison is a former distinguished professor of practice at Wake Forest University School of Business and serves on the board of visitors at the business schools at Wake Forest University, Duke University, and the University of North Carolina–Chapel Hill.

Hester Peirce is a senior research fellow at the Mercatus Center at George Mason University. Before joining the Mercatus Center, she served as a senior counsel to Senator Richard Shelby's staff on the Senate Committee on Banking, Housing, and Urban Affairs. Before that, she served as counsel to Commissioner Paul S. Atkins at the Securities and Exchange Commission and as a staff attorney in the commission’s Division of Investment Management.

Alex Pollock joined AEI in 2004 after 35 years in banking. He was president and chief executive officer of the Federal Home Loan Bank of Chicago from 1991 to 2004. He is the author of numerous articles on financial systems and the organizer of the “Deflating Bubble” series of AEI conferences. In 2007, he developed a one-page mortgage form to help borrowers understand their mortgage obligations. At AEI, he focuses on financial policy issues, including housing finance, government-sponsored enterprises, retirement finance, corporate governance, accounting standards, and the banking system. He is the lead director of CME Group, a director of Great Lakes Higher Education Corporation and the International Union for Housing Finance, and chairman of the board of the Great Books Foundation.

Peter J. Wallison, a codirector of AEI's program on financial policy studies, researches banking, insurance, and securities regulation. As general counsel of the US Department of the Treasury, he had a significant role in the development of the Reagan administration's proposals for the deregulation of the financial services industry. He also served as White House counsel to President Ronald Reagan and is the author of “Ronald Reagan: The Power of Conviction and the Success of His Presidency” (Westview Press, 2002). His other books include “Bad History, Worse Policy: How a False Narrative about the Financial Crisis Led to the Dodd-Frank Act” (2013); “Competitive Equity: A Better Way to Organize Mutual Funds” (2007); “Privatizing Fannie Mae, Freddie Mac, and the Federal Home Loan Banks” (2004); “The GAAP Gap: Corporate Disclosure in the Internet Age” (2000); and “Optional Federal Chartering and Regulation of Insurance Companies” (2000).

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