Rules to prevent another Wall Street meltdown would be frozen under Trump ‘moratorium’

From The Washington Post:

For months, Republican presidential nominee Donald Trump has railed against a dense set of banking industry regulations meant to prevent a repeat of the 2008 financial crisis. Dodd Frank, as the legislative package is known, includes hundreds of new regulatory requirements, including forcing banks to hold more capital and prove that they can withstand economic turmoil.

Trump has said he would “dismantle” key parts of the legislation.

And then on Monday, in an economic speech in Detroit, Trump went even further, saying that upon being elected he would call for a ”moratorium” on new regulations. Excessive regulation, he said, had stifled economic growth and killed jobs.

“I am going to cut regulations massively,” Trump said.

While Trump’s proposal would cover a wide swath of what Washington does, the effect on the financial sector would be particularly pronounced, leaving key aspects of Dodd Frank undone. As of July, six years after the legislation was passed, rules have not been proposed to address about 20 percent of the Dodd Frank requirements, according to data collected by Davis Polk, a large Washington law firm. The Securities and Exchange Commission has missed the deadline for about 17 percent of the regulations it was supposed to implement, for example.

Among the rules that have yet to be implemented is a curb on Wall Street pay. (The rules have been proposed, but not adopted.) In addition, rules to limit risks in the complicated world of derivatives and commodity markets  – that caused many of the problems during the financial crisis – are still being worked out.

There are other parts of Trump’s economic plan that will gain favor on Wall Street. He would do away with the estate tax, known by its critics as the “death tax.” Trump said he would eliminate the so-called “carried …

Continue Reading