The new Trump banking plan is released and its horrible. With Goldman Saks cronies at the helm, it’s no wonder the plan is an absolute give away to the big banks. This was obvious to all of us. Trump is rolling back regulation but unleashing the bankers. Once again they will go on to $#% us over. Badly. And we don’t have another 23 trillion to bail them out again. So what happens then.
Treasury Secretary Stephen Munchking, errr Mnuchin, is going to let Bankers go Wild yet again. Mnuchen was Chief Information Officer at Goldman Saks where he worked for 17 years. After he left Goldman Sachs in 2002, he worked for and founded several hedge funds.
After the Fed gave the banks huge (30B to Goldman Saks alone) interest free loans, then let them deposit the money back at the Fed for interest, bankers made a killing these last few years. Executives got massive bonuses in the billions, and laughed their way to the bank. Now that those loans are paid back, earnings at banks and companies like Goldman are collapsing. Even CEO Loyd Blankfein cut his salary back from 24 million to 22 million. So without that propped up funny money stimulus banks are going to return to struggling and have a hard time meeting capital requirements as they gamble away depositor’s money. And this is precisely the reason behind the need to push through changes so that banks no longer maintain capital minimums. Stress test a bank today, it would be laughable which if any could pass?
All of the the 2008 collapse reforms would be parred back – adjusting the annual stress tests, easing trading rules (i.e., gutting the Volcker Rule), and paring back the power of the watchdogs – like the Consumer Financial Protection Bureau (CFPB).
On the Volcker Rule, Treasury outlined several ways that regulators would remove it – Banks with less than $10 billion in assets should be exempted altogether, the report argued. It also said all lenders should have more leeway to trade and that restrictions on banks’ investing in private-equity and hedge funds should be loosened.
Much of the report covers complex areas like how much of a capital cushion lenders should have or how to calculate the amount of leverage a bank takes on. The Treasury is also highly critical of international capital standards that the largest banks are required to follow.
Critically, it de-fangs the CPFB, which investigates bank fraud. In short, its a COMPLETE GIVEAWAY TO THE BIG FAT BANKERS WHO RULE AMERICA.
This is frightening. But expected.