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Banks under pressure (pixabay/geralt)
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US president Donald Trump ordered a loosening of the regularizations of the financial market.

15 February 2017
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Of Counsel (AEoI, CRS, FATCA)

US president Donald Trump ordered a loosening of the regularizations of the financial market. Last week he signed a decree aiming at a revision of the 2010 Dodd-Frank Act that regulates the banks (https://www.whitehouse.gov/the-press-office/2017/02/03/presidential-executive-order-core-principles-regulating-united-states). The law of that time required, among other things, that the financial institutions have a higher equity ratio to prevent indebtedness. Janet Yellen (FED) promised to cooperate with the Treasure Secretary and to obey Trump’s order. By the way: Yellen also said that credit growth in the USA was robust and that there were now laws determining that banks were not allowed to use their equity for the granting of credits. She added that, all in all, US banks were better capitalized despite (or perhaps because of) the Dodd-Frank Act and that they were more profitable than their European counterparts and had thus been able to gain market shares.