ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Trump Proposals

Revamping Bank Regulation

One of Donald Trump’s big election promises was a substantial rollback of bank regulation. Trump and his Republican followers believe the regulations ushered in by the Dodd–Frank Act in the United States (US) are too onerous and too complex. They think it could render large US banks uncompetitive, make it difficult for small banks to survive and discourage innovation and risk-taking.

Bank stocks surged following Trump’s victory on hopes that the new President would keep many of his promises. Not much has happened so far but there are indications lately of the shape of things to come. Last June, the US Treasury came out with a report co-authored by Treasury Secretary Steven Mnuchin that outlines its thinking on the subject of bank regulation (US Department of the Treasury 2017). The report argues that banks have been choked by excessive regulation since the crisis. Proof: bank lending has risen by only 25% since the crisis, far less than in previous recoveries, and gross domestic product (GDP) growth has been sluggish.

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Updated On : 16th Oct, 2017

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