Will Donald Trump undo Dodd Frank Act today? Such initiative was one his campaign promises. Today, he is expected to sign the order to dismantle the act.
3 February, AtoZForex – The President of the US, Donald Trump is due to execute his first plan on revising the parts of the Dodd-Frank reforms.
Will Donald Trump undo Dodd Frank Act?
The Dodd-Frank Wall Street Reform Act was signed by the former US President Barack Obama in 2010 as a response to the 2008 financial crisis. The changes brought by the reform had an effect on all federal financial regulatory bodies and imposed restrictions on retail Forex firms. Hence, a lot of retail brokerages withdraw from the US, leaving the electronic trading environment of the US to Chicago’s listed derivatives firms, proprietary shops.
During his Presidential campaign, Mr. Trump has vowed to revoke the Dodd-Frank Act. Earlier last year, AtoZForex reported that the transition team of Donald Trump “will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation.”
The day has come! Today, Mr. President is due to take first steps in relation to the Dodd-Frank Act revision. Moreover, Donald Trump will also motivate the financial professionals, who are offering retirement advice. He is expected to consider trimming the rule that orders them to act in the best interest of their clients, according to the senior White House official. The former Goldman Sachs executive, Gary Cohn, stated that Donald Trump would ink the executive order for dismantling some parts of Dodd-Frank.
Can Trump dismantle the Dodd-Frank by himself?
Yet, the power of the President to do so is limited. Only Congress can make such major decision to the act it passed in 2010. However, Mr. Trump can utilize the orders to indicate his priorities and direct the regulators. Mr. Cohn has commented:
“This is a table setter for a bunch of stuff that is coming.”
The “fiduciary rule” on retirement advice has been a key topic for discussion among broker-dealers and other financial advisers since the time Mr. Obama has proposed it. Such law would require the advisers to recommend the best product for their clients, rather than just a suitable one.
Earlier this week, Donald Trump has mentioned: “we’re going to be doing a big number on Dodd-Frank.” Moreover, he has called the legal Act a “disaster.” Yet, pulling apart the Dodd-Frank Act involves political risks for the new administration. This is due to the fact that such action might undermine the anti-elite sentiment of his Presidential campaign.
The nominated US Treasury Secretary, Steven Mnuchin, stated that he will “kill” the parts of the law, including the Volcker rule. The rule is restricting banks on placing bets with their own funds.
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