logo
Share SHARE
FONT-SIZE Plus   Neg

Big Banks Salivate Over Trump Financial Reforms

Banking-061317-lt.jpg

The U.S. Treasury Department on Monday unveiled a long-awaited plan for overhauling bank rules, aiming to ease regulations on financial sector that were imposed after the financial crisis.

The report, prepared under the direction of Secretary Steven Mnuchin, proposes changes including easing up of restrictions big banks face in their trading operations since the passage of the Dodd-Frank Act, and adjusting the annual stress tests they must undergo to assess whether lenders can endure economic downturns.

The Trump administration also called for reducing the powers of the Consumer Financial Protection Bureau or CFPB, which is accused of aggressively pursuing bad behavior by financial institutions. The Treasury Department said the President should be able to remove CFPB director.

The plan is also said to expand the authority of the Financial Stability Oversight Council, which is chaired by Mnuchin.

"Properly structuring regulation of the U.S. financial system is critical to achieve the administration's goal of sustained economic growth and to create opportunities for all Americans to benefit from a stronger economy," Mnuchin stated.

The report was generally applauded by banking industry, which has been seeking many of the proposed changes for long that are expected to mostly benefit major banks like JPMorgan Chase, Citigroup, and Bank of America, among others.

Rob Nichols, president of the American Bankers Association, urged regulators and Congress to take up these recommendations expeditiously, and to consider additional changes so banks can continue to play their important role in accelerating economic growth.

The Treasury review, which President Donald Trump requested in an executive order in February, offered the most detailed plans to date for re-writing the financial regulations put in place after the 2008 financial crisis.

It also recommended greater exemptions from the Volcker Rule, which bans banks from trading for their own gain. The report called for rules to be revised to give small community banks relief from regulatory scrutiny such as stress tests.

Mnuchin reportedly said that the nearly 150-page report suggested more than 100 changes, most of which would be made through regulators rather than Congress.

He said, "We think about 80 percent of the substance in the report can be accomplished by regulatory changes, and about 20 percent by legislation."

Meanwhile, Democrats were quick to criticize the report as a big bank-inspired wish list. According to them, Dodd-Frank is vital for keeping on checking Wall Street after its risky trading nearly collapsed U.S. economy in 2008.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

comments powered by Disqus
Follow RTT