Barney Frank, a former Democratic congressman from Massachusetts, and former Deputy Treasury Secretary Sarah Raskin held a discussion Wednesday about how the United States' financial services industry has evolved since the Great Recession. 

Co-sponsored by the Duke University School of Law and the Kenan Institute for Ethics, the event marked an opportunity for students to gain insight from the former congressman and Raskin who is a Rubenstein fellow. 

“2008 could have been worse than the Great Depression," Frank said. "In the late 1920s, you could have one place that was doing okay and then one place that was doing poorly. When Lehman [Brothers investment bank] went under, the whole world was doing poorly.” 

Frank, who gave another talk Tuesday, is one of the congressmen behind the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which was passed as a response to the financial crisis of 2007-2008. The act places restrictions on the way banks can invest their money, regulates financial instruments such as credit-default swaps and charters various councils that monitor the financial stability of firms that could disrupt the economy if they were to declare bankruptcy. 

Following the collapse of Lehman Brothers in the fall of 2008, the government’s logic behind deciding not to bailout the bank “was made with the welfare of the average American in mind," Frank explained. 

"We avoided a shutdown of the economy, [which would have caused] much more pain for the average person," he said.

The former congressman noted that one trend that picked up during the crisis is a distaste for government that has been exacerbated over the last few years.

"Government became very unpopular," he said.

Frank also noted that challenges remain with identifying problems in large financial institutions, saying that "how big [of an institution] is too big is an unanswerable question."

Raskin listed “structural changes in the economy and a consequent lack of understanding of how consumers are integrated into markets” as the primary reasons for why the financial crisis lasted so long.

In response to the fact that big banks are currently recording historically high profits, Raskin explained her take on the changing risk landscape of the nation. 

“We are seeing in our country a gradual shift in economic risk, from firms...into the realm of the consumer," she said.

Raskin cited Wells Fargo’s unauthorized opening of false consumer accounts and the recent Equifax breach as concrete examples of this evolving trend. 

The two speakers also discussed the future of the financial system and considered the prospects of blockchain technology. 

Raskin noted how “areas of the world currently without an ability to borrow and save could be empowered by cryptocurrencies,” which are technically immune to the effects of government interference because they are not issued by a central authority. 

However, one potential concern with the new technology is whether it could one day become too large and powerful to be effectively controlled, she said. As interest in cryptocurrencies like bitcoin rise, “regulators will have to keep an eye out in the event that they get too big to manage.”