Friday, February 3, 2017

Trump assigns the easing of financial market rules – TIME ONLINE

US President Donald Trump has arranged to verify the strict regulations for the banking and financial sector. In the Oval Office he signed a decree aimed at the Revision of a law from the year 2010 on the regulation of banks. The former law required the financial institutions to, among other things, a higher equity ratio in order to prevent their over-Indebtedness. Now the Treasury and the Ministry of labour this review.

The rules, which were introduced by the government Trump is now Reviewing, as a reaction to the financial crisis of 2008. The core of the so-called Dodd-Frank law, which Trumps the predecessor Barack Obama signed in July 2010. For one, banks are not allowed to comment since then on his own account on the financial market, risky bets. On the other, the law allows supervision of the financial market, banks that are in financial difficulties, in receivership and ordered. In addition, the act laid the basis for the establishment of the US Agency for consumer protection in the financial accounting (CFPB).

Already in the election campaign, Trump had announced that the regulation of the financial markets to weaken. This project, he reiterated after a Meeting with representatives of smaller firms: “The regulation has, in fact, terrible for corporations, but for small companies it was even worse.” The entrepreneurial spirit suffer, access to credit is made difficult. “Dodd-Frank is a Disaster,” said Trump, four days before he issued the corresponding order.

The decrees, the Trump sign will not have an immediate effect: The Dodd-Frank act, only Congress can change. There, the Republicans have the majority – they were from the beginning, under President Obama, the law is critical. Also Trumps the Minister of Finance, Steven Mnuchin, a former Goldman Sachs Banker, is not regarded as a friend of the regulation.

trump’s chief economic adviser Gary Cohn told the Wall Street Journal, the Americans a richer variety of better products would have been if the banks would not have to pay each year hundreds of billions of dollars in regulatory costs. In addition, a law of the previous government could be stopped, the obligated in the core financial firms to act in the case of retirement pension products with the customer in mind rather than the own profit maximization.

The Wall Street Reform was one of the core projects of Obama after taking office in 2009. At that time, the memory of the financial crisis was still fresh, and in particular the collapse of the Bank Lehman Brothers in the autumn of 2008. The crisis had a massive impact on the economy as a whole and many of the citizens : Many companies went bankrupt, indebted home owners were forced out of their real estate, unemployment in the US rose rapidly.


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