Arnold Kling points to a speech by J. Christopher Giancarlo (a commissioner of the Commodities Future Trading Commission), and excerpts (in part) this passage:
"At the heart of the 2008 financial crisis was the inability of regulators to assess and quantify the counterparty credit risk of large banks and swap dealers."
I'm going to go out on a limb here and say that at the heart of the 2008 financial crisis was the inability of the players themselves to assess and quantify the counterparty credit risk of large banks and swap dealer.
But that is just nit-pickery. Giancarlo also said this (one gets the idea he is not a fan of Dodd-Frank either):
The hue and cry of the ongoing financial market reforms under Dodd-Frank and the FSB leaves market regulators and participants with very little available bandwidth to assess and prepare for the next financial crisis – a crisis that will certainly be unlike the last one.
Just as “peacetime generals are always fighting the last war” and “economists fight the last depression,” so too do financial regulators outlaw past market abuses that are not a looming threat to our financial markets and economies. The Dodd-Frank Act and its unceasing implementation are uniquely positioned to ensure U.S. market regulators stay focused on the past.
Allow me to use a simple analogy. U.S. market regulators are riding together in an automobile on a high-speed interstate highway. The Dodd-Frank Act is an oversized rear-view mirror covering almost the entire windshield. That rear-view mirror directs our attention to the enormous amount of rules and requirements generated over the past five years that need to be completed or reworked to meet Dodd-Frank’s never-ending demands. Meanwhile, financial markets continue to evolve and pass by at remarkable speed. New dangers are coming right at us. As we regulators barrel down the road of 21st century financial markets, we must shed this backwards-looking approach to regulating or we will not be able to see the oncoming traffic and looming dangers ahead.
As they say, read the whole thing.