Donald Trump signals plans to dismantle Dodd-Frank

 
Hayley Kirton
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The new president-elect had previously suggested he might tear up the financial sector red tape (Source: Getty)

Donald Trump's team has signalled its intention to tear up a key piece of banking regulation.

"The Dodd-Frank economy does not work for working people," a statement on the new president-elect's website read. "Bureaucratic red tape and Washington mandates are not the answer.

"The Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation."

Read more: Trump says he wants Obama's "counsel"

The statement should not come as a total surprise to Wall Street, as Trump had previously voiced his intention to scrap the Dodd-Frank reforms, an extensive set of reforms designed to address risk on Wall Street following the financial crisis. However, nobody could be sure if he was all talk or if there was going to be some action.

In a note released shortly after the election result became clear, credit ratings agency Moody's said of an potential plans to get rid of Dodd-Frank: "While a reduction in regulatory compliance costs would bolster bank earnings, reduced oversight and a roll-back of requirements would also result in a weakening a of banks' capital and liquidity positions."

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