As Democrats drew fire at Truump saying that his order lacked substance and squarely aligned him with Wall Street bankers, U.S. President Donald Trump ordered reviews of major banking rules that were put in place after the 2008 financial crisis.
Financial markets embraced Trump's signal that looser banking regulation is coming and pushed bank stocks higher though the order was short on specifics. The Dow Jones U.S. Banks stocks index closed up 2.6 percent.
Trump said his administration expects "to be cutting a lot out of Dodd-Frank," he said at a White House forum on Friday with U.S. business leaders, including JPMorgan Chase's CEO Jamie Dimon.
Former Democratic congressman Barney Frank, co-author of the 2010 Dodd-Frank Wall Street reform law that raised capital requirements for banks said that will involve a lot more than issuing an order. The earlier law created the Consumer Financial Protection Bureau to guard against predatory lending and restricted banks’ trading by means of the "Volcker Rule."
Trump "can’t make any substantial change in the financial reform bill without Congress,” Frank said. "The language in the order doesn’t do anything. It tells the secretary of the Treasury to give them something to read. The tone of it is to weaken the bill.”
Its regulations have hindered lending, Trump and other critics of the Dodd-Frank law say. At the meeting with CEO's Trump said, "I have so many people, friends of mine, that have nice businesses that can’t borrow money...because the banks just won’t let them borrow because of the rules and regulations in Dodd-Frank."
U.S. commercial-bank lending at a 70-year high, climbing steadily since late-2010, showed recent data from the Federal Reserve Bank of St. Louis despite such criticisms.
Trump was accused of forsaking middle and lower-income individuals to help banks by Democratic Senator Elizabeth Warren who lobbied for the creation of the Consumer Financial Protection Bureau.
"The Wall Street bankers and lobbyists whose greed and recklessness nearly destroyed this country may be toasting each other with champagne, but the American people have not forgotten the 2008 financial crisis - and they will not forget what happened today,” she said in a statement.
Gary Cohn, previously a top official at Goldman Sachs, was Trump's adviser leading the deregulation effort and the director of National Economic. In the meanwhile, on regulation across the government, Trump is being counseled by bllionaire investor Carl Icahn.
According to a White House official, possible regulatory changes and legislation modifying Dodd-Frank in 120 days is required to submitted by the U.S. Treasury Secretary as required by one order signed by Trump.
Trump's pick for Treasury secretary, Steve Mnuchin, also a former Goldman banker, has yet to be confirmed by the full Senate.
A "fiduciary rule" for brokers offering retirement advice that was finalized in 2016, in the meanwhile, has been asked to be reviewed by a memo to the Labor Department. The order did not mention any delay even though early reports said Trump wanted to push off the rule's implementation, originally slated for April.
There were either no comments or comments were denied to the media by representatives of the six largest U.S. banks – JPMorgan Chase & Co, Bank of America Corp, Citigroup Inc, Wells Fargo & Co, Goldman Sachs Group Inc and Morgan Stanley.
(Source:www.reuters.com)
Financial markets embraced Trump's signal that looser banking regulation is coming and pushed bank stocks higher though the order was short on specifics. The Dow Jones U.S. Banks stocks index closed up 2.6 percent.
Trump said his administration expects "to be cutting a lot out of Dodd-Frank," he said at a White House forum on Friday with U.S. business leaders, including JPMorgan Chase's CEO Jamie Dimon.
Former Democratic congressman Barney Frank, co-author of the 2010 Dodd-Frank Wall Street reform law that raised capital requirements for banks said that will involve a lot more than issuing an order. The earlier law created the Consumer Financial Protection Bureau to guard against predatory lending and restricted banks’ trading by means of the "Volcker Rule."
Trump "can’t make any substantial change in the financial reform bill without Congress,” Frank said. "The language in the order doesn’t do anything. It tells the secretary of the Treasury to give them something to read. The tone of it is to weaken the bill.”
Its regulations have hindered lending, Trump and other critics of the Dodd-Frank law say. At the meeting with CEO's Trump said, "I have so many people, friends of mine, that have nice businesses that can’t borrow money...because the banks just won’t let them borrow because of the rules and regulations in Dodd-Frank."
U.S. commercial-bank lending at a 70-year high, climbing steadily since late-2010, showed recent data from the Federal Reserve Bank of St. Louis despite such criticisms.
Trump was accused of forsaking middle and lower-income individuals to help banks by Democratic Senator Elizabeth Warren who lobbied for the creation of the Consumer Financial Protection Bureau.
"The Wall Street bankers and lobbyists whose greed and recklessness nearly destroyed this country may be toasting each other with champagne, but the American people have not forgotten the 2008 financial crisis - and they will not forget what happened today,” she said in a statement.
Gary Cohn, previously a top official at Goldman Sachs, was Trump's adviser leading the deregulation effort and the director of National Economic. In the meanwhile, on regulation across the government, Trump is being counseled by bllionaire investor Carl Icahn.
According to a White House official, possible regulatory changes and legislation modifying Dodd-Frank in 120 days is required to submitted by the U.S. Treasury Secretary as required by one order signed by Trump.
Trump's pick for Treasury secretary, Steve Mnuchin, also a former Goldman banker, has yet to be confirmed by the full Senate.
A "fiduciary rule" for brokers offering retirement advice that was finalized in 2016, in the meanwhile, has been asked to be reviewed by a memo to the Labor Department. The order did not mention any delay even though early reports said Trump wanted to push off the rule's implementation, originally slated for April.
There were either no comments or comments were denied to the media by representatives of the six largest U.S. banks – JPMorgan Chase & Co, Bank of America Corp, Citigroup Inc, Wells Fargo & Co, Goldman Sachs Group Inc and Morgan Stanley.
(Source:www.reuters.com)
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