American regulators are generally on the safe side before the inauguration of Donald Trump as president of the United States on January 20. After Gary Gensler – the president of the SEC, the policeman of Wall Street, great slayer of crypto-assets – or Mick Mulvaney – director of the consumer protection office, responsible for protecting Americans against the abuses of the financial sector – it is it is the turn of Michaël Barr, vice-president of the American Federal Reserve (Fed), in charge of banking supervision, to announce his resignation.
“The risk of conflict around this function risks distracting us from our mission [de supervision et de régulation du système financier]. In the current environment, I felt that I would be most useful to the American people in my role as [simple] governor »declared Michaël Barr in a Fed press release. The central bank has clarified that it does not intend to take major regulatory action until the successor to the vice president in charge of supervision has been confirmed.
Basel III in question
Michaël Barr, who has held the position of vice-president in charge of banking supervision since July 2022, played a decisive role in the context of the “finalization” of the international prudential rules of Basel III, in particular to encourage large American banks to better comply with this regulatory body, which has become more demanding since the great financial crisis of 2008.
However, the vice-president’s initiatives have often been criticized by the lobby of American banks, particularly regional banks, by legislators, and more generally, by the Republican camp, hostile in principle to regulation.
-Dodd-Franck and Lambeaux
It was also under the first presidency of Donald Trump that many prudential rules were dramatically reduced for “small” banks, which led to abuses among certain establishments and the bankruptcy of several banks in the spring of 2023, including that of Silicon Valley Bank (SVB), a textbook case of a total absence of asset/liability management which would have been unthinkable in Europe. However, European banks are themselves beginning to step up to challenge Basel III in the name of the principle of equal treatment and competition.
Deregulation of the banking sector is one of the key points of Donald Trump’s economic program for his next term, which has allowed the sector to take off on the stock market. This involves dismantling, once and for all, what remains of the Dodd-Frank regulations, passed in 2010, in the wake of the “subprime” scandal, which almost brought down the American financial sector without massive and decisive aid from the State.
