A New Report by Treasury Department

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According to a report released yesterday, the Trump administration seems to be taking aim at the Dodd-Frank Act. For starters, these are regulations that were implemented by financial institutions following the 2009 recession. According to the report by the Treasury department, the administration was giving a recommendation on reworking on a number of Wall Street rules. Some of the recommendations include doing away with the requirement to have a pay ration between employees and chief executives. The rules would also see the companies streamline derivatives rules while at the same time providing them with opportunities to invest money in more places. The new rules would give the companies and investors access to more money. After the report was made public, major players in the Wall Street welcomed the ideas. Many are the times that banks in the Wall Street have complained that the Dodd-Frank rules were restricting them in one way or the other. However, the same rules have been met with skepticism especially from consumer groups. These groups believe that these relaxed rules could have fair reaching consequences to the financial system. The report also has some guidelines for Commodity Futures Trading Commission and Securities Exchange Commission. These are institutions that work on derivatives, bonds and stocks by ensuring that the rules have been followed. The document is 220 pages.

Some economists say that this should be seen as an indication by the Trump administration that there is the need to loosen market restraints. A similar report had been released in June by the treasury department. In this report, there was the recommendation of weakening the Consumer Financial Protection Bureau. The same report recommended giving exemptions to the Volcker Rule. For starters, this is a rule that prevents banks from investing in speculative bets. The recommendation also sought to lighten small community bank scrutiny. The two reports are said to have been as a result of the executive order that was released by President Trump in February. More reports are expected before the end of 2017. The order was directed to Steven Mnuchin, the Treasury Secretary. The aim was to relax financial rules that would result in the drafting of new rules that go along with the aims of the Trump administration. The treasury secretary defended the report saying that the country had experienced slow economic growth rate for a while. This is why the administration wants to streamline the regulatory system.

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