Donald Trump today insisted he will chop chunks from the US' key banking laws, despite growing skeptism from Wall Street that he can deliver on his promises.
Speaking with a group of business leaders, the US President stated he would like to change the Dodd-Frank rules – the extensive reforms designed to address risk in banking in the aftermath of the financial crisis – so it would be easier for banks to loan money.
"We are absolutely destroying these horrible regulations that have been placed on your heads...You have regulations that are horrendous," he said. "Dodd-Frank is an example of what we're working on and we're working on it right now.
"We're going to be coming out with some very strong – far beyond recommendations – we're going to be doing things that are going to be very good for the banking industry so that the banks can loan money to people who need it."
He continued: "We're going to do a very major haircut on Dodd-Frank. We want strong restrictions, we want strong regulation. But not regulation that makes it impossible for the banks to loan to people that are going to create jobs."
Meanwhile, in the JP Morgan chief exec's annual letter to shareholders, Jamie Dimon commented he was in favour of a big review of the red tape governing banking, although he would not go as far as scrapping Dodd-Frank entirely.
"The regulatory environment is unnecessarily complex, costly and sometimes confusing," Dimon wrote. "No rational person could think that everything that was done was good, fair, sensible and effective, or coherent and consistent in creating a safer and stronger system.
"We believe (and many studies show) that poorly conceived and uncoordinated regulations have damaged our economy, inhibiting growth and jobs – and this has hurt the average American.
"We are not looking to throw out the entirety of Dodd-Frank or other rules (many of which were not specifically prescribed in Dodd-Frank). It is, however, appropriate to open up the rulebook in the light of day and rework the rules and regulations that don't work well or are unnecessary."
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The JP Morgan boss added he was concerned that, if other EU leaders did not address concerns raised by Brexit, it could eventually split the bloc.
"While we are not predicting this will happen, the probabilities have certainly gone up – and we will keep a close eye on the situation in Europe over the next several years," Dimon added.
Speaking of the impact of Brexit on his own firm, Dimon said the bank would need to take measures to ensure it could continue to serve clients on day one of Brexit, although this would "not entail moving many people in the next two years".
Trump has been gunning for Dodd-Frank for some time. The US President signed an executive order to review the complex bundle of banking rules shortly after he entered the White House this year. He also pledged to repeal the Dodd-Frank Act during the course of his election campaign.
Shares in US banks, which were mostly down when the market opened, have started trending up. At time of writing:
- JP Morgan is trading up 0.6 per cent at $87.57
- Goldman Sachs is trading up 0.5 per cent at $230.13
- Citigroup is trading up 0.3 per cent at $59.83
- Morgan Stanley is trading up 0.1 per cent at $42.76