Will Trump Target FDIC’s Dodd-Frank Resolution Powers?
By Lalita Clozel
December 12, 2016
If there’s one piece of the Dodd-Frank Act that most banks like — and many academics applaud — it’s the provisions that allow the government to seize and unwind a failing banking company. Yet in their desire to undo the 2010 financial reform law, many in the industry fear those measures — found in Title II of the statute — will be a primary target under President-elect Donald Trump. … When it comes to “areas where populist views — the left and the right — essentially agree” topping the list is that Title II needs to go, said Karen Shaw Petrou, a managing partner at Federal Financial Analytics. … “The kinds of actions that were taken in 2008 to rescue very large nonbanks and backstop very big bank holding companies could not occur under Title II,” said Petrou. “And markets are pricing that.” … “We have a post-crisis view of big banks as evildoers,” said Petrou. “Sometimes banks fail because of things that have nothing to do with banks.”