Recently, a major report by Bloomberg has attracted widespread attention in the financial community: the White House is vigorously strengthening its control over financial regulatory agencies. Starting next week, independent agencies such as the U.S. Securities and Exchange Commission (SEC), the U.S. Commodity Futures Trading Commission (CFTC), and the Federal Deposit Insurance Corporation will be included in the White House's regulatory scope. Before any rules are introduced, they must obtain approval from the Trump administration, and even the Federal Reserve may be affected.
According to the order and draft guidance signed by Trump, the Federal Reserve's monetary functions remain independent, but any rules it sets as a banking regulator must be submitted to the White House for review. This move undoubtedly breaks the Federal Reserve's long-standing relatively independent regulatory structure and has caused many concerns. Peter Shane, an honorary law professor at Ohio State University, pointed out that the U.S. Supreme Court may not recognize Trump's administrative theory because it will undermine the independence of the Federal Reserve and threaten the stability of global markets.
Not only that, the Trump administration also plans to significantly reduce the size of the U.S. Consumer Financial Protection Bureau (CFPB), cutting nearly 90% of its employees, about 1,500 people will be laid off, and only about 200 people will be retained. CFPB Acting Director Russ Vought claimed that the layoffs were to "reorganize CFPB operations to better reflect the agency's priorities and mission", but this statement is difficult to convince the public. Since its establishment after the 2008 financial crisis, the U.S. Consumer Financial Protection Bureau has been committed to protecting American consumers from financial fraud and abuse. Now it is facing such a large-scale layoff, which has aroused many doubts and opposition. Massachusetts Democratic Senator Elizabeth Warren angrily accused that the Trump administration's actions were preventing the agency from performing its duties, leaving Americans who have been deceived by big banks and big companies with nowhere to turn, and vowed to fight back with all her might.
The White House's series of actions against financial regulators this time have a lot to think about, and the motivations and impacts behind them. Is this to optimize the regulatory system, or is there another purpose? What kind of chain reaction will it bring to the US and even global financial markets?
