President Trump launches 120-day review of financial regulation
On Feb. 3, President Trump issued an executive order outlining seven core principles for financial market oversight and calling on regulators to review existing laws and regulations to determine if they promote these principles.
The core principles include fostering economic growth and "vibrant financial markets" through more rigorous analysis of regulatory impact. The principles also include making regulation "efficient, effective and appropriately tailored," preventing "taxpayer-funded bailouts," and advancing the interests of the U.S. in international financial regulatory negotiations and meetings.
White House officials explained that the order will be the first step toward fulfilling Trump's campaign promise to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation. The order does not, however, explicitly call for the repeal of the 2010 law. Instead, it directs the Treasury secretary to conduct a review over the following 120 days and report back to the White House on the extent to which existing "laws, treaties, regulations, guidance, reporting and recordkeeping requirements" promote the seven core principles.
The review process will be directed by Steven Mnuchin, who was sworn in as Treasury Secretary in February. As part of that process, Treasury will consult with the member agencies of the Financial Stability Oversight Council, which includes the Commodity Futures Trading Commission, the Securities and Exchange Commission and the Federal Reserve.
On Feb. 3, FIA issued a statement welcoming the decision to review the regulatory framework and reiterating the concerns that the association outlined in an open letter to U.S. policymakers on Jan. 25. In that letter, FIA urged the Trump administration and Congressional leaders to rely on three broad principles as they reassess the regulations put in place on the derivatives markets since the financial crisis. Those principles are smart regulation and enforcement, globally accessible markets, and innovation and competition.
"Now is the appropriate time to review and simplify the regulatory framework developed following the financial crisis and determine whether these regulations are in fact meeting their public objectives," FIA's President and CEO Walt Lukken wrote in the letter.
