The mood in the room was decidedly chummy. U.S. President Donald Trump had invited the heads of America’s biggest financial institutions to the White House to discuss no less than the future of Wall Street. Speaking about Jamie Dimon, head of JP Morgan, President Trump was all compliments. “No one can tell me more about Dodd-Frank than Jamie,” he said, according to the New York Times.
Dodd-Frank is the name of a wide-ranging law passed under the Obama administration after the 2008 financial crisis with the goal of preventing similar disasters. According to Mr. Trump and the Republican Party, the legislation, which was signed into law in 2010, has become an enormous burden on the U.S. economy.
This is why the new president on Friday signed an executive action ordering a review of the regulatory system. It has been widely perceived to be setting the groundwork for repealing the contested law. While Mr. Trump’s executive order is vague, it emphasizes the “core principles” of strengthening American investors and offering the U.S. a competitive edge for international investment.
After the 2008 crisis, politicians and regulatory watchdogs around the world took action to fight against the excesses of the banks. At a G20 meeting in Washington, the political leaders of 20 major economies swore to work together to reform the financial industry and set international minimum standards.
Now the worry is that the international consensus on reform is gone – and that more tightly-regulated European banks could be put at a disadvantage.