President Donald Trump promised before he was elected to start a regulatory bonfire in Washington to make life easier for businesses, and now there has been a clear sign that he is serious about deregulation, which is worrying some Wall Street critics.
Trump claims regulations choke off growth and prevent major infrastructure projects from being approved.
‘We’re going to do a very major haircut on Dodd-Frank. We want strong restrictions. We want strong regulation, but not regulation that makes it impossible for the banks to loan to people that are going to create jobs,” said Trump, who promised a major announcement shortly.
The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed by President Obama in 2010 as a response to the sub-prime meltdown on Wall Street in 2008. In 2,300 pages it attempts to ensure that no such financial crisis could happen again.
One key aspect is its separation of banks’ investment and commercial operations, a nod back to the Glass-Steagall act of 1333 which outlawed the practice, thought in part to be responsible for the Great Depression. Bill Clinton scrapped Glass-Steagall when he was president.