Administration calls for easing rules for financial markets

Published October 06, 2017
Associated Press

The Trump administration on Friday recommended ways to loosen the rules governing the U.S. stock, bond and derivatives markets, proposing a rollback of a variety of tougher requirements adopted in the wake of the 2008 financial crisis.

The 220-page report, prepared by the Treasury Department, argues that numerous rules enforced by such agencies as the Securities and Exchange Commission and the Commodity Futures Trading Commission need to be changed to promote stronger economic growth.

The report, called for by an executive order President Trump issued in February, was the second the administration has done laying out its vision for easing regulations imposed by the 2010 Dodd-Frank Act, which the administration believes went too far and has hurt economic growth. The first report in June dealt with banking regulations.

Treasury Secretary Steven Mnuchin said the report had examined the capital markets with the goal of eliminating regulations that were standing in the way of economic growth and capital formation.

"By streamlining the regulatory system, we can make the U.S. capital markets a true source of economic growth which will harness American ingenuity and allow small businesses to grow," Mnuchin said in a statement.

The report identified a number of ways that regulations could be eased on companies that are looking to go public to reserve a troubling trend which has seen nearly a 50 percent decline in the number of publicly traded companies over the past two decades.

The recommendations included streamlining disclosure requirements to reduce costs for companies. Treasury said the modified rules would still provide investors with the information they need to make sound investment decisions.

The report recommended modifying various sections of the Dodd-Frank Act which Donald Trump had repeatedly attacked during the campaign as a "disaster" that had crimped lending and stifled the economy's ability to grow by imposing burdensome regulations.

The Dodd-Frank law was passed when Democrats controlled both the House and Senate and was an effort to tighten financial regulations following the 2008 financial crisis that had sparked the Great Recession and cost millions of Americans their jobs and homes.

One of the recommendations in the Treasury report would eliminate the requirement that companies show how much their chief executive officers are paid compared to the pay of their average workers.

Many of the recommendations zero in on parts of the Dodd-Frank Act that Republicans have long opposed, contending that the requirements have hurt the ability of companies to raise the investments they need to expand and create jobs.