Sometime since the enactment of the law, the regulators apparently decided that they have no idea how to liquidate a financial giant. They specifically don’t know where they could find buyers for the biggest pieces—other than the remaining too-big-to-fail institutions, which would then become even bigger. And Congress gave up 200 years of legal tradition in the bankruptcy courts for this? …

Moody’s focuses much of its attention on the risks and volatility of the capital markets businesses. And yes, Wall Street firms carry large risks. Underwriting the issuance of new stocks and bonds, lending money to home buyers, making markets in different securities, and taking particular trading positions all carry risks and do not lend themselves to steady, predictable earnings. But these risks are not new. …

But 2,300 pages of Dodd-Frank and countless other federal efforts to put sand in the financial gears are also taking their toll. The Obama tax and regulatory frenzy, of which Dodd-Frank is a part, weighs on economic growth. Those are our words, not Moody’s, but the rating agency does note that the abysmal economic environment is a drag on ratings for everyone.