End of Dodd-Frank Regulations?
Whatever opinions you have about Donald Trump being president, he is going through with his political promises. One of them is the dismantling the regulations imposed by Dodd-Frank. According to Donald Trump, small business owners:
Just can’t get any money because the banks just won’t let them borrow it because of the rules and regulations in Dodd-Frank.
I am wondering what effects will you see as Donald Trump starts to slowly dismantle the financial regulations imposed during the Obama administration. Do you think that this will lead to another financial crisis like in 2008? Or, is Trump right and that Dodd-Frank is actually a hindrance for business growth.
Do you think banks will be able to regulate themselves?
And if so, do you think there should be any safety nets (i.e Gov. bailout) for banks that manage to blow up by their own fault?
This push is a bit questionable and not very sincere. Community banks and smaller firms are doing well. Lending for investment and consumption is up because we have all been able to deleverage (except in mortgages and student loans). Bank profits are up across the board due to the Fed 'normalizing' interest rates. At the end of the day, it's just Trump being duped again by the people closest to him in his ear. Are we supposed to be on the hook for bank's stupidity, effectively subsidizing their risk taking? Or should we put up a wall and cut them off from the nipple? It shifts domestic security to the micro level where the issue is happening. The irony in Trump wanting a safer US but is then going to return to any terrorist or criminal conducting nefarious banking activities.
But, moving into firmer territory, the reason banks are doing well and looking to be in better position is because they are taking part in the benefits of a stronger economy. The Obama regulations were good and they pissed Elizabeth Warren off, which was also good. If we keep stronger safety measures between government and wall street, it leaves the tax payer off the hook, and puts the responsibility back on banks. I worked in operations at a bank and saw how everyone was bitching about who we did business with, and took greater concern with keeping money out of the hands of potential terrorists and criminals. It's not a bad deal, because banks should do the legwork. The only real issue is that it increases costs marginally, but it does have the potential of being effective in allowing the economy to function better.
Bout time! Time to get back to trading!
The chances of a full dismantle are slim and not something thats going to happen overnight. Additionally, changes of any kind will require additional support. Don't expect changes (probably more like amendments) to turn back the clock to a time before Dodd-Frank and Volcker.
Look, I'm all for minimising regulation and government interference where possible. I've worked for the government, and know that governments are absolute shit at getting things done efficiently.
That being said... I do think that there are areas where government intervention is absolutely required. In particular, the government has to step in when there are places where profits are internalised but costs are to whatever degree externalised. This was the case leading up to the events of 07/07, and is the case in several other areas, including but not limited to environmental issues and healthcare.
I'm all for Dodd-Frank, and think that dismantling it is a fucking terrible idea. You know that shit we all learn in Finance 101 about how businesses should stick to what they're good at, and not "diversify" into areas that run counter to what they should be doing? Yeah, to me, that's what Dodd-Frank is all about. IBD is a fundamentally different area from S&T, which is itself fundamentally different from retail and commercial lending. Why the fuck should these businesses be tied together?
FATCA can go suck on a pair of hairy balls. Bullshit like giving every Tom, Dick and Harry access to college "education" (STEM? Good. Business? Fine. Underwater basket weaving? Sod off!) is a drain on the economy. And don't even get me started on gun control and the drug war.
Dodd-Frank? Absolutely necessary to prevent a bunch of self-serving cowboys from stealing wealth from the country.
+1 SB (first for me to give on here, newb here!)
Well spoken. Wasn't Dodd-Frank placed in to prevent the 2008 mishap?
PS - (I might get MS), I did not see The Big Short yet.
Dolor voluptatum et modi non recusandae. Molestiae voluptas architecto perferendis nihil. Sunt sapiente cum ipsam sapiente molestiae nostrum et. Error ab laborum nesciunt dolorum sequi reprehenderit magni.
Quos consectetur voluptatem itaque rerum et est incidunt est. Magnam accusantium commodi perferendis eveniet. Iure velit optio tenetur eligendi ut illum rerum. Quibusdam ullam beatae quae aut dolor nihil dolorem nisi.
Fuga quia accusamus ipsum beatae deleniti consequatur. Temporibus incidunt accusamus molestiae harum. Blanditiis deleniti delectus exercitationem nihil.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...