Despite taking a stance against Wall Street in the run-up to the election, President Donald Trump signaled a new, friendlier environment for Wall Street, calling late last week for the end of regulation put in place by the Obama administration.
According to a report by The Wall Street Journal on Friday (Feb. 3), Trump vowed to get rid of a ton of regulations placed on financial firms after the financial crisis of 2008. WSJ noted, at the same time, President Trump praised the chief executives of BlackRock and JPMorgan, thanking BlackRock CEO Larry Fink for doing a “great job for me.”
“He managed a lot of my money.” The president then went on to heap praise on James Dimon, CEO of JPMorgan, saying: “There is nobody better to tell me about Dodd-Frank than Jamie.”
Not surprisingly, shares of bank stocks surged on Friday as Trump ushered in this new era of less regulation. His new stance was applauded by the financial industry, as well as Republicans, who have long tried to get rid of Dodd-Frank and lower the regulatory costs that financial firms have to pay as a result of regulation. Democrats reacted negatively, calling Trump’s move shortsighted, noted the report. The paper noted that one of Trump’s plans calls on regulators to find costly rules and laws, such as Dodd-Frank, and another directive makes it possible for the retirement savings rule that took effect in April to be rolled back.
WSJ noted that White House National Economic Council Director Gary Cohn, who was a senior executive at Goldman Sachs just 40 days ago, came up with the Trump administration’s deregulatory plans. Trump also called on the Labor Department to review a rule that restricts how retirement advice is given, noted WSJ. He also reiterated his stance that Dodd-Frank needs to be dismantled, saying: “I have so many people, friends of mine, that had nice businesses. They can’t borrow money. They 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.”