By Panayiotis Neufelt
On 24th May 2018, Donald Trump signed a law that exempts US banks from basic laws and regulations passed in 2010 by the so-called Dodd-Frank Wall Street Reform (FOR) and the Consumer Protection Act (PCA) (Public Law 111–203 and Statutes at Large 124 Stat.1376–2223). The 24th May new law, resulted from the Financial CHOICE Act, voted on 8 June 2017 by the Trump Government, signed to law by President Trump, and includes once again the deregulation of Wall Street’s stock market.
For the history, the Dodd-Frank and Consumer Protection Act shielded the newly established regulatory agencies for systemic risk studies and regulation, stock trading and investment mechanisms from pyramidal investment, from derivatives and profiteering, supporting the consumer interest and security, as well as arrangements for the operation of the agencies credit rating. In general terms, it was an Act to promote the financial stability by improving transparency in the financial system, protecting at the same time the consumers from abusive practices by the banking and stock market systems.
Legislation and amendments were passed in 2010 to prevent, future time, financial crisis similar to the 2007-2008 financial bubble crisis. Similar abrogations, amendments and resolutions of laws were made during the 1990’s. In 1999, the Glass-Steagall Act was overturned. The road for speculative trading, on the part of Wall Street firms, was open for the new derivatives products and markets. An imaginary financial orgy in the dark, without knowing who owes, what and to whom.
The results were disastrous, as the liberalization of stock exchange and banking volume of foreign transactions, real estate, commodities etc., led to the collapse of the American economy ten years ago, the worst since the 1929 Wall Street Crash.
FOR and PCA were created precisely to monitor the behavior of American banking system and stock market and were specifically abolished to re-create a proportionate, if not greater destructive, bubble that we will find ahead of us. America turns its calendar twenty years back and history repeats itself.
And let us not forget that these global financial markets choices, did eventually lead to the snapping of the Greek National Insurance funds (the merger of the National Insurance treasuries started in the same bleak period, at the end of 1990) and structured toxic bonds, which were consumed by Greece, to the surrender or deconstruction of the Greek banking system, the foreclosure of the Greek gold (that was transported in secrecy in the US before 2003) and the contemporary memoranda and austerity.
Let us only hope that a possible future collapse of international markets and the financial system will not coincide with the completion of Western China’s urbanization, where millions of citizens already evolve from rural consumers to urban.