TRUMP AGENDA - Making Banking More Risky for Consumers

"Outgoing Fed official sees room for banking rule changes, but fears financial crisis forgetfulness" PBS NewsHour 4/6/2017

Excerpt

SUMMARY:  Federal Reserve governor Daniel Tarullo was central to the implementation of the Dodd-Frank Act, which imposed tougher regulations on banks in the wake of the financial crisis.  Though his term isn't up until 2022, Tarullo is now stepping down, just as President Trump is expected to scale back much of the regulation put in place.  Tarullo joins economics correspondent Paul Solman for a conversation.

PAUL SOLMAN (NewsHour):  Federal Reserve Governor Daniel Tarullo has been called one of the most powerful U.S. banking regulators since Alexander Hamilton.  Appointed by President Obama in 2009, Tarullo was central to the implementation of the 2010 Dodd-frank Act, which imposed tougher regulations on banks in the wake of the financial crisis.

Under his watch, the Fed has sought to curb banks' reliance on short-term loans and to increase the amount of capital they must keep on hand.  But President Trump is expected to try to scale back much of what was put in place.

On our visit to the Fed last week, Tarullo's wasn't the only empty office we found.  Since Senate Republicans refused to vote on two of President Obama's nominees, there are now three openings on the seven-member board of governors.  That means President Trump will have a chance to put his mark on Fed policy going forward.

Daniel Tarullo, welcome to the program.

DANIEL TARULLO, Federal Reserve Governor:  Good to be with you.

PAUL SOLMAN:  Your appointment's through 2022, right, so why are you leaving now?

DANIEL TARULLO:  Well, you know, eight years is a long time.  I came here, along with other people, with a sense of the need to rebuild the financial regulatory system.

I think we have made a lot of progress towards that end.  And I think there comes a time where everybody individually wants to do something else, and where it's time to let other people try their hand at the job you have been occupying.

PAUL SOLMAN:  Well, in this case, try their hand at dismantling what you in particular have been doing.

DANIEL TARULLO:  Well, I don't really expect that there's going to be a dismantling of some of the major accomplishments that we have had.  And I certainly hope not.  And I don't think it would be something the American people would want to see, Democrats or Republicans, particularly with respect to the additional requirements that we and the other banking agencies have placed on the largest, most systemically important financial institutions, those that almost failed during the crisis.

I think there's a broad-based view that stronger capital requirements and better oversight is something that's needed there indefinitely.