Trump Government Attempts to Weaken The Financial Regulatory Bodies By Slivering Their Powers

110
0
SHARE

After the financial crisis in 2008, the Dodd-Frank Act related to the financial regulations provided a very strict regulation for the banking and financial companies in regards to their operational activities. The Trump government is eyeing the Consumer Financial Protection Bureau and targets to reduce the decision-making authority of this financial body. According to a report released by the government on Monday evening, some strategic decisions which can be expected by the government to be taken would be to allow the President to suspend or remove the director of this body. The other change would be to the Volcker Rule; wherein the banks were earlier restricted by the rule to do any trading which would only benefit them and at least allow small and local banks from the stringent regulations and leniently perform business activities.

The Treasury secretary, Steven Mnuchin consider this to be a positive step to generate employment for all the unemployed Americans and improve the current conditions of the economic system and achieve sustainability. The primary intentions are to support the community banks and credit union by reducing the stringent rules and regulations and ease their operational activities in order to grow and support the economic development of the country. The procedural activities that led to these decisions were started by the Government in the month of February when Trump assigned additional authorities to the Treasury Department to important regulations related to the Dodd-Frank law.

These decisions would change the face of the banking and financial system in the US. Dodd-Frank law restricts the banks and financial institutions from taking any extra risk and maintain a balance between the capital and liquid funds available to them for executing their activities. The orderly liquidation authority of the Dodd-Frank law would also be changed and replaced by a new law which will not allow some giant banks to file for bankruptcy which is considered to be difficult to fail. Although the Senate has started preparation of passing this new bill and developing new legislation in relation to the financial institutions, they desperately need a support of the Democrats if they want this bill and legislation to be happily passed in the assembly.

Till now, many Democrats are a strong supporter of the Dodd-Frank law and expect that there can be some alterations made to the Volcker Rule. Removing completely the Volcker Rule would not benefit the financial and economic system of the country and would simply benefit the small and medium scale banks and financial institutions.

LEAVE A REPLY

Please enter your comment!
Please enter your name here