Wall Street and the White House

The relationship between Wall Street and the White House is closer than ever. Donald Trump will soon begin to release Wall Street from controls that President Obama imposed on banks and financial advisers.

President Donald Trump is on Friday due to take his first steps towards undoing parts of the Dodd-Frank reforms that reshaped US banking in the aftermath of the financial crisis.

Mr Trump will also cheer financial professionals who offer retirement advice by directing his officials to consider scrapping a rule that orders them to act in the best interests of their clients, a senior White House official told the Wall Street Journal. [Emphasis added.]

Gary Cohn, the former Goldman Sachs executive who is now director of the White House’s National Economic Council, said Mr Trump would sign executive orders preparing the way to fulfil a campaign pledge to dismantle parts of Dodd-Frank. ….

The so-called “fiduciary rule” on retirement advice, which is in the White House’s crosshairs, has been the target of fierce lobbying by broker-dealers and other financial advisers since it was proposed by the Obama administration in 2015.

Although not yet in force, it will require them to recommend the best product for their clients, not just a suitable product. [Emphasis added.] ….

Steven Mnuchin, the hedge fund manager nominated to be Treasury secretary, has promised to “kill” parts of the [Dodd-Frank] law, including the Volcker rule, which put curbs on banks placing bets with their own money.

Barney Jopson, “Trump to take first step towards dismantling Dodd-Frank reforms“, Financial Times, 4 February 2017 (gated paywall).

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