The Fed has lightened the load on America’s banks
But it’s only a regulatory recalibration, not a Trumpian trashingOct 15th 2019AMERICA’S BANKS had high hopes for Donald Trump’s presidency. Perhaps no industry had greater expectations of sweeping deregulation. On the campaign trail in 2016 Mr Trump had promised to dismantle the Dodd-Frank Act of 2010, which put in place stricter rules after the financial crisis. Wall Street seemed to believe him. Banks’ share prices rose by more than a third in the six months after his election.Regulation has eased under Mr Trump. In a flurry of activity, the Federal Reserve has approved several rule changes in the past few days. Yet there has been no regulatory bonfire, and such changes as there have been have mainly benefited smaller banks. Big banks have done nicely nevertheless, borne up by America’s long economic expansion and by Mr Trump’s broad corporate-tax cut at the end of 2017. They also have the advantage of sheer scale, which among other things has allowed them to splurge billions on new technology. Admittedly, the third-quarter earnings season, which began on October 15th, looks unspectacular. The Federal Reserve’s interest-rate cuts are squeezing lending margins. But the giants have been on a good run; and JPMorgan Chase, the biggest of the lot, still reported an 8% rise in net profit, to $9.1bn.Choose us for news analysis that respects your time and intelligenceSubscribe to The EconomistWe filter out the noise of the daily news cycle and analyse the trends that matterWe give you rigorous, deeply researched and fact-checked journalism. That’s why Americans named us their most trusted news source in 2017Available wherever you are—in print, digital and, uniquely, in audio, fully narrated by professional broadcastersThis website adheres to all nine of NewsGuard‘s standards of credibility and transparency.ORContinue reading this articleRegister with an email address