President Donald Trump’s pledge to scale back regulatory controls in the financial industry would be detrimental to everybody, according to the President of Germany’s financial regulator.
Trump repeatedly pledged to repeal financial regulations throughout his election campaign and even vowed to repeal Dodd-Frank, which was passed after the financial crisis with the aim of limiting Wall Street’s ability to make risky investments.
“If (deregulation equivalent to pre-financial crisis levels) were to happen I wouldn’t like it of course… I’m a regulator and a broad phase of deregulation would be a very bad thing indeed for everybody,” Felix Hufeld, president at BaFin, told CNBC on Thursday.
“What everybody needs right now is regulatory certainty for an extended period of time so let’s get out of those vast cycles of strong regulation, deregulation, crisis and so forth… That’s not what we should do,” he added.
Trump has advocated the scrapping of some financial rules in order to aid U.S. business and met with 10 senior executives on Monday to state his belief he could cut regulations by 75 percent or “maybe more.”
The details of his proposed cuts to regulation controls have not yet been unveiled and Hufeld stressed it is “too early to tell” which policies the new U.S. administration would enact.
“We don’t know what the details are and in banking regulation, details matter… so it is simply premature to make any judgment about the exact course of what deregulation is supposed to mean,” he concluded