Question

which of these statements is true of the dodd - frank act of 2010?
a. this law created the federal reserve system (the fed) to serve as the central bank in the united states.
b. this law reversed the banking acts prohibition of banks selling insurance or acting as investment banks.
c. this law included provisions to ensure that external auditors had no authority to investigate unethical behavior.
d. this law created the financial stability oversight council to identify emerging risks in the financial sector.

Explanation:

• The Federal Reserve System was created by the Federal Reserve Act of 1913, not the Dodd - Frank Act of 2010. So option a is incorrect.
• The Gramm - Leach - Bliley Act (not Dodd - Frank) reversed the Banking Act's prohibition of banks selling insurance or acting as investment banks. So option b is incorrect.
• The Dodd - Frank Act aimed to increase oversight, not limit external auditors' authority. External auditors still have authority to investigate unethical behavior. So option c is incorrect.
• The Dodd - Frank Act did create the Financial Stability Oversight Council to identify emerging risks in the financial sector.

Answer:

d. This law created the Financial Stability Oversight Council to identify emerging risks in the financial sector.