The banking industry’s rough year could finally test whether Dodd Frank is strong enough

The Washington Post reports:

Financial reform requirements mean that banks have larger financial cushions to withstand heavy losses on loans to the energy sector, analysts say. “Of course, should oil prices fall to $20 [per barrel] and stay there for an extended period, which we don’t foresee, then the story changes for the worse,” Oja said.

Even if Wall Street is prepared to withstand weakness in the U.S. economy, falling oil prices, or low interest rates, analysts say, the bigger threat may lay overseas. European banking giants Deutsche Bank and Credit Suisse recently reported their first full-year loss since the financial crisis, sending their stock prices down 25 percent and 36 percent respectively so far this year.

The struggles of an un-free market in banking.