To expect wise actions from a person who keeps running a country like he is running his personal business is unwise of us, not him. Mr. Trump is full of surprises, not a single one of it so far has been a pleasant one. A man who ran his businesses by borrowing from the banks throughout the past 30 years and repeatedly declaring bankruptcy, now is all set to payback the favours owed over the years by changing a financial framework that will spell disaster for the commercial banking sector.
Dodd-Franks Financial Regulatory Framework was an act put in place in 2010 after the world suffered a financial crisis solely based on the mistakes of the American banking system. This act simply puts stricter measures and controls on the U.S. banking system and requires them to conduct business with higher capital requirement. Banks have to have a solid capital base in order to continue conducting business as usual. This not only protects the consumers but also strengthens the overall financial system. In absence of this framework, we can expect another financial crisis in the American banking system which could be contagious to the world financial markets.
Mr. Trump has asked his Treasury Secretary to give him recommendations over the next 90 days in order for him to issue another Executive Order dismantling the Dodd-Frank framework. Rolling back this framework will allow banks to do business with much less capital and will also promote an environment of senseless risk taking by investing into asset classes that have no solid protection system. If this happens, then the banks will have a free hand to trade in riskier asset classes using their own funds. And just like the events leading up to 2008 crisis, greed will run rampant, controls will be few, CEO’s will run after bigger bonuses, corporate finance departments will innovate worthless bundles of products and the marketing departments will sell these bundles cross the Atlantic to the already capital anemic European banks.
“Executive Orders” are a privilege not a tool to run a country as a President. This man, Trump, in the guise of national interest is set to ruin a country which was the beacon of hope and leadership for the world. Moussalini, Hitler, Stalin, Napolean, all thought of themselves as intelligent, nationalists. But history has proven that when you begin to think of yourself as the Cure-For-All, the next thing that happens is that you need to be cured yourself, of your mental illnesses. And Trump seems to need a mental health professional more than he needs professional advice. The man is leading himself in a direction where he will become a very eligible candidate to be admitted into an asylum, a mental asylum, from where he can run a cabinet of fools, like he seems to be doing for practice now.
By. Mir Mohammad Alikhan