Financial deregulation under President Trump

At the core of US President Donald Trump’s economic agenda is tax reform, deregulation and a shift away from multilateral to bilateral trade agreements. President Trump’s deregulation of the financial sector has been largely achieved by the passing of the Economic Growth, Regulatory Relief, and Consumer Protection Act 2018 (PL 115–174) (EGRRCPA). The Act implements a vast array of US Treasury proposals presented in June 2017, aimed at reducing the regulatory burden on banks.[1] The Federal Reserve has also made a few changes to ensure bank supervision is compliant with EGRRCPA. It has further made two proposals to partially modify the current banking leverage ratios and the Volcker rule, which prohibits proprietary trading by depository banks using FDIC-protected funds. This article attempts to present the changes arising from the recent legislation and the potential consequences of the Federal Reserve proposals.