Wall Street reform that Barack Obama had created after the great financial crisis of sub-prime mortgages will be dismantled by Donald Trump. The new president of the United States continues to amaze by continuing on a path opposite to that undertaken by his predecessor.
An executive order was signed which loosens existing rules and reduces supervision over large American financial groups. At the same time, a second decree approved by the White House tenant establishes the modification of the rule, which would have entered into force in April, according to which the pension consultants would have been obliged to operate "in the best interest of the clients" for the purpose of avoid the sale of risky products unable to guarantee a decent income at the time of retirement. Pending corrections, the operation is postponed for 180 days.
The aforementioned rules had been strongly desired by Obama in order to prevent the recurrence of another crisis due to the wickedness of American finance which in 2008 led to the worst recession that the US has experienced over the last 80 years.
The executive orders signed by Donald Trump, who will call the Italian Prime Minister Paolo Gentiloni today evening, represent a real U-turn and keep another of the promises that the tycoon had made during the electoral campaign. However, it should be emphasized that the one established today is only a first step, the actual revision of the reform will come only later and will have to pass through the vote of Congress.
Meeting with biggest business leaders this morning. Good jobs are coming back to US, health care and tax bills are being crafted NOW!
— Donald J. Trump (@realDonaldTrump) 3 February 2017
Going into details, the first decree establishes a revision of the Dodd-Frank Act of 2010, the largest Wall Street reform of the past decades, which imposed precise rules on banks, limiting the use of derivatives and private funds and establishing the Financial Stability Overnight Council. Trump, just a week ago, had called it "a disaster".
However, there are other important changes on the table, such as the possible abolition of the Consumer Financial Protection Bureau, the body that deals with the protection of consumers in relations with financial institutions and the farewell to the Volker Rule, i.e. the rule that prevents banks businessman to use deposit money for speculation. On the eve of the signing, a White House official teased: "There are some things we could do on Dodd-Frank that we believe will have a fairly immediate and dramatic impact," such as "staff reductions" in regulatory agencies.
