President Trump signed an executive order on Friday February 3rd, 2017 which will attempt to pull back on the Dodd-Frank financial market regulations. The Dodd-Frank law was passed as a result of the 2008 financial collapse. As of today, the stock market is still on a significant bull run, hitting all time highs. But many in the financial industry and related submarkets are cautiously watching the events as they are unfolding.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, was signed by President Obama in 2010. Obama called it a “sweeping overall of the United States financial regulatory system”. The law included a new oversight council to evaluate systematic risk, comprehensive regulation of financial markets including increasing transparency of derivatives, a new consumer protection agency, standards to strengthen investor protection, regulation of credit rating agencies, and minimized banks ability to invest in private equity and hedge funds. At this point everything is on the table for change. Young Americans should watch these changes and find opportunities that arise.
Every Republican President since Theordore Roosevelt in the early 1900s has had a recession in their first term. No one really knows what this administration will do, but Republicans have had a track record of making financial decisions that do not necessarily benefit the masses. Although Trump has made a big push to keep American jobs local, the reality is technology is moving faster than we could possibly keep up with. Americans should be seeking to harness technology and use it as an asset, not as a competitor.
This executive order instructs the Treasury secretary to review and consult with regulatory agencies to find changes to Dodd-Frank. Senate is still confirming Trump’s Treasury Secretary nominee Steve Mnuchin. Steve is a former partner at Goldman Sachs and hedge fund manager. Steve was also the national finance chairman for the Trump campaign. Although Steve is a talented financier, there was a specific reason the banks were regulated. To assume banks will self police is a dangerous proposition.