Was Trump's 2018 repeal of Dodd-Frank a good idea?

What was risky about the investments? Do you even know?

What made the investments a problem was the interest rate hikes.
https://www.ft.com/content/5e444ba2-0afc-49e8-bfec-5fc17ef7ee39

Your anti-Trump, capitalists are evil, there needs to be more government control schtick isn't going to fly.

 

Oh, so it's up to Congress, not the president? That means that there's no way Trump repesled Dodd-Frank.

 

Yes, and I felt it after you repeated yourself for the 3rd time. I assumed its just the way you roll.

No one said it forces anything. You are arguing against a point you invented. Me and others have explained the point to you, and you can either accept it or ignore it.

Yes, for safe-keeping. I dont think people realized the bank would take their deposit and gamble them away.

If you say so, but most people (practically everyone) do so knowing a bank it in fact a safe place to keep your money, and that it is insured (for a good reason). I don't know anyone who doesn't have a bank account and an understanding that their account in insured.

 

What specific regulations should have been put back into place? Spare us the vagaries.

 

I presume you thought this to be a zinger? Boy you really got me! ( sarcasm)

Zzz

 

But TRUMP TRUMP TRUMP

Read the opening where he admits he doesn’t know if what he claims Trump did had anything to do with it but writes a long diatribe trying to do so.....

Maybe we can have another investigation

 

Your post did nothing of the sort. Everything I said was accurate. Just because you don't like it doesn't make it incorrect.

 

Yea, they kinda are saying that. The left is trying to tie this to trump by way of dodd-frank. That's complete garbage as SVB did this all on their own. You can't get around this fact.

Nobody has contradicted or countered anything I've said because what I've said is all true. The removal of regulations does not cause anything. It may allow stupid people to do stupid things, but that's still their decision.

Then they should've done their homework or they, at minimum, should've made sure their money was insured. Failure to do those things is on them. You are responsible for what happens with your money and that doesn't get excused when you give it to an institution.

I do say so because it's a fact.

I've read the vast majority of these deposits were not insured. If true, that's on them. It's not trumps fault they didn't make sure their money was insured.

 

Sure, stupid bankers gambling with your money is their decision. Duh! Its not so much about stupid, but greed. Thats they they lobby for removal of obstacles, and it seems law makers never learn, because this happened in 1980s, 2008, and now again. Fortunately this time its small scale.

 

Warren is also an expert on banking, and she disagrees. Barney might have a point on Signature Bank, the bank on which he was a Board Member, which was heavily involved with the FTX failure, which, though I'm' not clear on details as I am no expert, I believe crypto is outside the purview of the SEC and bank regulators, and Dodd Frank, but, I'll have to research it. But, it does suggest taht a new Dodd Frank type bill should have something in it for crypto.

Changing the threshold from $50 billion to $250 billion for the stress test is precisely the reason SVB failed, because it's assets were $209 billion and thus was not subject to the test. .

Had SVB been subjected to the stress test, it would have been flagged as top heavy, and it wouldn't have been allowed to invest in low yield bonds in an rising interest rate environment, which led to it's failure.


In fact, Barney's support of the partial repeal, which changed the threshold, he therefore contributed to the problem, along with the republicans and the 17 conservative democrats, but more importantly, the man who signed the bill, Donald Trump, are responsible. And Trump, more than anyone, is responsible because had it arrived at Biden's desk he wouldn't have signed it. I can only guess that Barney wasn't happy with the final bill given compromises from Republicans that dems had to make to get it through both houses.

That being said, Dodd Frank can be improved on or replaced entirely with something better, and that is what is needed.

 

The argument that offenders in the financial community are stupid is not quite right. They aren't stupid.. They are greedy and greed has a way of corrupting individuals. But, to assert that removing regulations does not cause anything and that it is solely the responsibility of individuals to make decisions is flawed for several reasons.

Firstly, regulations exist precisely to prevent people from making harmful decisions. That the regulation is lifted doesn't exonerate anyone, each of us are still responsible for our acts. But, by removing regulations, it does, indeed, 'cause' something; it causes individuals to have the freedom to make decisions that can have negative consequences, not only themselves but also for others. For example, the repeal of regulations on the banking industry led to the 2008 financial crisis, which resulted in widespread economic damage and job losses. More specifically, deregulation in the financial industry was the primary cause of the 2008 financial crash. It allowed speculation on derivatives backed by cheap, wantonly-issued mortgages, available to even those with questionable creditworthiness.

Now, no one is suggesting that we should regulate every facet of life to prevent people form doing harmful things, that would be way too burdensome, but where it is prudent, where a few individuals who are responsible for the funds of others, others who have a reasonable expectation that the people caring for their deposits, i.e., their money, will be responsible.

One of the central pieces of legislation that deregulated derivatives was the Commodity Futures Modernization Act of 2000, sponsored by Republicans, passing both houses in bipartisan fashion, signed into law by Bill Clinton. It is noteworthy that the prevalence of the deregulation philosophy the permeated the 80s onward, was essentially due to the advent of neoliberal thinking, as introduced, and accelerated by Ronald Reagan, economists such as Milton Friedman and the Chicago and Austrian schools of economics ( away from Keynesian thinking). Clinton, by progressive standards, was considered as a neoliberal ( the philosophy that believes in complete deregulation for deregulation's sake)

Secondly, the argument assumes that all individuals have access to the same information and resources to make informed decisions. However, this is not always the case, especially when dealing with complex financial matters. In many cases, individuals may not have the necessary knowledge or experience to make informed decisions, leaving them vulnerable to unscrupulous actors who may take advantage of their lack of understanding.

Thirdly, the argument overlooks the fact that individuals are not operating in a vacuum. Their decisions can have far-reaching consequences for others, such as when a corporation's reckless actions endanger the health and safety of its workers or the environment. By removing regulations that hold corporations accountable for their actions, this is effectively enabling them to prioritize profit over the well-being of people and the planet.

Lastly, it is important to acknowledge that regulations are not perfect and may need to be revised or updated to reflect changing circumstances. However, the solution is not to remove all regulations but rather to work towards improving and refining them to better serve their intended purpose.

In summary, the argument that removing regulations does not cause anything and that individuals are solely responsible for their decisions is flawed. Regulations exist for a reason and removing them can have negative consequences for individuals and society as a whole. Rather than removing all regulations, we should strive to improve and refine them to better serve their intended purpose.

 

SVB invested a fortune in low yield bonds in a rising interest rate environment, and the 'stress test' i.e., the Comprehensive Capital Analysis and Review (CCAR), which is an annual exercise that evaluates the capital planning processes and capital adequacy of large banks in the United States, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and it is certain that this test would have flagged the bank for remedial action.

The partial repeal of Dodd-Frank by Donald Trump raised the threshold from $50 billion to $250 billion, and since SVB's assets were $209 billion, it wasn't subject to the test, or at least, not the yearly, more stringent test, where it would have been flagged but for the repeal. But, as there is so often in life, there's more to this story:

As we know, In 2018, President Donald Trump signed a bipartisan bill, called the Economic Growth, Regulatory Relief, and Consumer Protection Act, which included a partial repeal of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The bill raised the threshold for the Comprehensive Capital Analysis and Review (CCAR) stress test from $50 billion to $250 billion in assets, meaning that banks with less than $250 billion in assets are no longer subject to CCAR stress testing. However, banks with assets between $100 billion and $250 billion are still required to undergo periodic supervisory stress tests by the Federal Reserve, although with reduced frequency and scope compared to CCAR testing. The change was aimed at reducing regulatory burden on smaller banks while maintaining oversight of the largest banks.

In my view, it's not absolutely clear that Trump's repeal is '100% responsible', because:

Banks with assets between $100 billion and $250 billion that remain subject to stress testing after the partial repeal of Dodd-Frank are subject to reduced scope in terms of the frequency and intensity of stress testing requirements.

Under the Dodd-Frank Act, these banks were required to undergo CCAR stress tests annually, with scenarios designed to be more stringent than those for smaller banks. However, under the new rules, these banks are required to undergo the stress tests only once every two years, and are subject to less-stringent requirements compared to the larger banks.

In particular, these banks are not required to undergo the Dodd-Frank Act stress test scenarios but are instead subject to a tailored set of scenarios designed to reflect their specific risks and business models. Additionally, these banks are not subject to the so-called "qualitative assessment" of their capital planning process, which evaluates the banks' ability to identify and manage risks and is conducted in addition to the quantitative analysis of their capital levels.

Overall, while banks with assets between $100 billion and $250 billion remain subject to stress testing requirements, the scope and intensity of the tests they are required to undergo have been reduced compared to the larger banks subject to CCAR testing. My view is that Trump shouldn't have signed the repeal, he should have sent it back for revision and improvement of Dodd Frank, where there would be no diminution of standards for banks above $50b.

I do,believe, however, it's fair to conclude the repeal didn't help, and may very well have contributed to the SVB failure. It would take a more therough analysis of all the facts to come to a definitive conclusion, and I do believe the DOJ has commenced an investigation, as they should.

Though I'm retired, I've owned a few small businesses, I most definitely believe in free, but regulated, enterprise.

What I'm against is simplistic reasoning, cheap shots, lazy retorts, posturing, self-puffery, non arguments and all their variants, including, but not limited to, sophomoric quips by the ignorant.

Not saying you are ignorant, or guilty of any of the above, I only ask that you just be a little more thoughtful in your replies.

 

I did some more research, and I provided a more robust and detailed comment on

http://politicalforum.com/index.php...ank-a-good-idea.609016/page-4#post-1074090283

The conclusion of this meets you half way, while I believe the Repeal didn't help, it could have contributed though it's not conclusive thus far, but that, in fact, more investigation is needed to determine the facts.

 

You call me ignorant, but you still keep claiming Trump repealed Dodd-Frank?...lol

 

No, I explicitly told you I didn't call you ignorant, but given that you referred to me as anti-Trump and believing that capitalism is evil, is is fair of me to ask that you be more thoughtful in your replies.

No, I asserted that Trump partially repealed Dodd Frank.

 

What I like and do not like is irrelevant to the subject under discussion.

You wrote:

Repealing any regulation doesn't force a business to do anything.

That, mudman, is a complete and total misunderstanding of the purpose of regulation, which is not to force anyone to do anything. The purpose of regulation on this subject would be to diminish the odds of banking crises from occurring..

In other words, your comment was not accurate.

 

No, you said,

"Not saying you are ignorant, or guilty of any of the above, I only ask that you just be a little more thoughtful in your replies."

Which is a chicken **** way to call me ignorant.

 

SVBs failure, as we're learning, is because of incompetency, not a lack of regulations.

 

It's up to congress, the senate, and the president

The partial repeal was bipartisan.

 

Well, I would suggest that prudent legislation would diminish the incompetent's ability to do damage.

However, I think it's too soon to come to any conclusions. The DOJ has commenced an investigation, we shall see what they come up with. In the meantime, I gave a more robust and detailed reply on this, here, if you care to review it.

http://politicalforum.com/index.php...y-bank-collapse.609033/page-2#post-1074090994

 

All the regulations in the world will never eradicate incompetence.

The bank was operated by a buncha woke Leftists. I wouldn't be surprised if this was an intentional attempt to crash the economy.

 

Then you must have a guilty conscience.

And you ought to be more thoughtful in your replies, noting that not being thoughtful doesn't presume ignorance, it just suggests it........


.......just as I suggested it, but did not outright make it.

And, moreover, you would do better by taking people's words at face value, and not project your preconceptions and misconceptions into their words.

 

Will, if one failure is the measure of 'incompetence' in men and women, than all successful men and women are incompetent, as failure on the road to success is common amongst the very competent. Trump declared bankruptcy 6 times. So, by your definition, he is incompetent x6.

Trump's bankruptcies

1. Trump Taj Mahal (1991)
2. Trump Plaza Hotel (1992)
3. Trump Hotels and Casinos Resorts (2004)
4. Trump Entertainment Resorts (2009)
5. Trump Entertainment Resorts (2014)
6. Trump Taj Mahal (2016)

Again, I repeat, you ought to be more thoughtful in your comments, research your conclusions, and substantiate them.

Now,to your point. No sheriff in the neighborhood can stop criminals from being criminals, but he can make crime more difficult to be perpetrated, and that the taxpayer dollars spent on the sheriff is a worthy expenditure. But the difference is, unlike out and out criminals, bank executives will follow the law (mostly) whatever the law is, so regulations are followed to a much greater extent than a criminal will ignore the law. Bank regulations work.

Vague words.

Feel free to define 'woke leftists', and after you do that, provide evidence of SVB's directors being 'work leftists', and how their alleged wokism had anything to do with their massive purchase of low yield bonds which was the salient purchase leading to their fall, noting that its board is less diverse than America's biggest and most successful banks.

I wouldn't be surprised at all that you make wild allegations without foundation in facts.

 

Damn!!!!! This is right between the eyes as a rebuttal, well done!

 

And yet he is still a multi-billionaire.