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March was a bad month for the Dodd-Frank Act. We now know that Dodd-Frank, passed in the wake of the 2007–2008 banking crisis, doesn’t prevent bank runs. Neither do post–2008 arrangements tell depositors whether large deposits are safe or should be withdrawn with a swipe on a smartphone. This time, uninsured deposits were bailed out. But in testimony to the Senate Finance Committee, Treasury Secretary Janet Yellen couldn’t say what would happen to uninsured deposits at other regional banks, telling Oklahoma Senator James Langford that whether they were bailed out would depend on what federal regulators decided. Instead of clarity and predictability, we have subjectivity and confusion. In short, Dodd-Frank and the post-2008 framework failed. ....
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