First results of Trump banking review into financial regulations expected in June
A government review ordered by the new Trump administration of 2010 U.S. financial reform laws is behind schedule. As a result, the review will report findings stage by stage. Priority has been given to the appraisal of banking regulations.
“Treasury has an entire team dedicated to reviewing the financial regulatory rules and will begin reporting our findings to the president in June,” the department spokesperson said.
Trump Banking Review
The review was commissioned by Trump in February. He instructed Treasury Secretary Steven Mnuchin to report back within 120 days. President Trump promised to do a “big number” on the Dodd-Frank financial reforms, put in place after the crisis of 2008.
These laws raised the levels for banks’ capital requirements and restrictions on leverage formalised expanded consumer protections. The laws also clamped down on banks’ freedom to make more speculative, high-risk trading decisions with customers’ money.
Review Delays
The US Treasury is still recruiting personnel to fill vacancies created by the transition of administrations. Not enough officials are in place to meet the 120-day timeline.
“Given the volume and scope of the issues we are reviewing that involve potential changes to the financial regulatory system, we are carefully considering the best options to begin rolling them out in the most effective and responsible manner,” a Treasury spokesperson said.
Regulatory Review To Follow
The review of regulations surrounding capital markets, clearing houses, derivatives, insurance, asset management industries, financial innovation, and banking technology will come later. The banking review is the first stage to be reported.
The review has been highly anticipated. It will provide a concrete and specific indication of the new Trump administration’s policy direction. This is in contrast to the broad rhetoric which the President has offered so far. The Trump administration’s drive for financial deregulation is being led by the former BlackRock Inc executive Craig Phillips. Who along with treasury officials, is consulting senior figures and groups in the banking industry on the formulation of banking Policy.
Trump also signed two additional executive orders in April. Those orders instructed a review of orderly liquidation authority and systemic designation. The former permits regulators to intervene and wind down failing financial institutions, while the latter adds caveats of stricter oversight to be applied to those firms large enough to be deemed essential to the overall health of the financial system.