What does the Dodd-Frank Act primarily aim to address?

The Dodd-Frank Act was enacted in response to the 2008 financial crisis, with a primary aim to address the systemic risks posed by large financial institutions that could jeopardize the economy if they failed. This regulation was introduced to reduce the likelihood of bailouts and to promote financial stability by increasing the oversight and accountability of those institutions considered "too big to fail."

While the act does touch upon other important areas, such as consumer credit regulations and derivatives trading, its core focus on preventing the risk posed by large banks and financial entities is what distinguishes it in the context of addressing the systemic risks in the financial system. By enhancing regulatory requirements and implementing stress tests, the Dodd-Frank Act seeks to ensure that large institutions can withstand economic shocks, thereby protecting the broader economy and consumers from future financial crises.