On Feb. 3, US president Donald Trump signed an executive order ordering the Treasury Secretary to review the laws and regulations governing the financial system. It was the first concrete step towards his promise, as a candidate, to dismantle the Dodd-Frank Act—the more than 800 pages (pdf) of laws, passed in the wake of the 2008 financial crisis, that were supposed to bring an end to “too big too fail” and stop banks using debt to trade for their own profit.
Phil Angelides was chairman of the Financial Crisis Inquiry Commission from 2009 to 2011, created by the US Congress to investigate the causes of the crisis. Angelides got to see the impacts up close: He oversaw 700 witness testimonies and public hearings from Miami to Sacramento, while interviewing banks and regulators. Dodd-Frank was passed while he was on the job. He said yesterday that Trump’s plans to pull it apart were “insane.” Here is his full statement:
In the wake of the financial crisis, millions of families lost their homes. Millions of people lost their jobs. The economy was wrecked and communities across the country were devastated. Big Wall Street banks admitted wrongdoing and paid tens of billions of dollars in fines. And now, with bankers at his side, President Trump begins to rip apart protections put in place to protect America’s families and our economy. Insane.
Trump’s main argument for dismantling the law is that it stifles lending. “I have so many people, friends of mine, who have nice businesses who can’t borrow money,” he said at a meeting with CEOs the day he signed the order. Among them were leaders of the big Wall Street banks who will benefit the most from having Dodd-Frank gutted. “There’s nobody better to tell me about Dodd-Frank than Jamie,” Trump said, pointing to Jamie Dimon, the CEO of JPMorgan Chase.
In the markets, bank stocks have been one of the biggest winners from Trump’s election, as investors have anticipated deregulation.