April 21, 2017
Trump Financial Law Executive Orders Signal Salad Days for Wall Street
Statements of Public Citizen Experts
Note: According to materials supplied by the White House to the press, President Donald Trump issued three executive orders today: one on the Financial Stability Oversight Council, one on a section of Wall Street reform law that empowers the government to take over large, failed financial institutions and one on measures that stop companies from evading taxes.
“President Trump’s latest executive orders are nothing more than special favors for the same Wall Street banks that crashed our economy in 2008 and put millions of Americans out of work. Until he fulfills his campaign pledge to restore Glass-Steagall, he’s making us more vulnerable to another crash.”
– Lisa Gilbert, vice president of legislative affairs, Public Citizen
“Republican Treasury Secretary Hank Paulson conceived the Financial Stability Oversight Council as a forum for catching financial risks that fall through the cracks between the various regulatory agencies. The biggest bailout in the financial crash went to insurance firm AIG, which fell through one such crack. An executive order that questions this oversight can signal to firms intent on high-risk financial ventures that play time is back.
“Rolling back what’s called the ‘Orderly Liquidation Authority’ in the Wall Street reform law invites the fallout the nation suffered from the Lehman bankruptcy in September 2008. Under the reform provision, regulators will attempt to maintain operations so that credit markets are not frozen. Trump’s order calls for study of a new form of bankruptcy that depends on a judge who may not have the expertise to handle a sprawling firm with interconnections throughout the economy.”
– Bartlett Naylor, financial policy advocate, Public Citizen’s Congress Watch division
“On the campaign trail, Trump talked frequently about the need to stop or discourage companies from deserting the United States by moving their companies to countries that are low- or no-tax jurisdictions. That’s why it’s so shocking to see him order this review, which could lead to a rollback of rules that would have sharply decreased incentives – and limited the ability of companies – to game the system by using inversions to permanently avoid a U.S. tax bill.”
– Susan Harley, deputy director, Public Citizen’s Congress Watch division