U.S. Treasury's proposal for financial deregulation aims to remove key aspects of the Dodd-Frank Act.

Rose Prince

2017-08-25 13:36:00 Fri ET

The U.S. Treasury's June 2017 grand proposal for financial deregulation aims to remove several aspects of the Dodd-Frank Act 2010 such as annual macro stress tests, supervisory bank capital reviews, proprietary trading restrictions, and so forth. Fed Vice Chair Stanley Fischer warns that the current financial deregulation can be extremely dangerous and myopic: "It took almost 80 years after 1930 for America to experience another [global] financial crisis that could have been of that magnitude... now after 10 years everyone wants to return to a status quo before the [next financial downturn]." 

As prior monetary policy turns out to be a rather ineffective solution for the post-crisis macro malaise, fiscal stimulus garners a lion's share of public attention toward lower income taxation and indefinite tax holiday for corporate offshore cash repatriation. Regardless of whether the Dodd-Frank supervisory stress instruments should remain for a more stable U.S. banking system, the Fischer comment rings the alarm bell of fiscal quid pro quo for weak monetary stimulus. This information exchange offers valuable food for thought to the typical stock market investor. While the trend can be his or her friend, the investor needs to weigh the pros and cons of short-term stock price momentum vis-a-vis the close nexus between long-term economic fluctuations and stock market gyrations.

 


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Federal Reserve Chair Jerome Powell announces the monetary policy decision to lower the federal funds rate by a quarter point to 2%-2.25%.

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Federal Reserve Chair Jerome Powell announces the monetary policy decision to lower the federal funds rate by a quarter point to 2%-2.25%.

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The Economist suggests that the world has learned few lessons of the global financial crisis from 2008 to 2009.

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The OECD projects global growth to decline from 3.2% to 2.9% in the current fiscal year 2019-2020.

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Federal Reserve normalizes the current interest rate hike to signal its own independence from the White House.

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OECD cuts the global economic growth forecast from 3.5% to 3.3% for the current fiscal year 2019-2020.

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2019-03-27 11:28:00 Wednesday ET

OECD cuts the global economic growth forecast from 3.5% to 3.3% for the current fiscal year 2019-2020.

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