Absorb losses during future periods of financial distress

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Dodd -Frank, the Collins Amendment, is intended to ensure that "financial institutions hold sufficient capital to absorb losses during future periods of financial distress."[1]Section 171 directs federal banking agencies to establish minimum leverage and risk-based capital requirements on a consolidated basis for insured depository institutions, their holding companies and nonbank financial companies that have been determined to be systemically significant by the Financial Stability Oversight Council (FSOC). Which extremely unpopular aspect of the 2008 financial crisis is this designed to prevent?

Reference no: EM13325160

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