Trump to cut US banking regulations

President Donald Trump had promised sweeping reforms to "horrendous" US banking regulations introduced following the financial crisis.

"We're going to do a very major haircut on Dodd-Frank," he said, referring to the Wall Street and consumer protection rules Barack Obama enacted in 2010.

Dodd-Frank was intended to prevent banks from taking on excessive risk and to separate investment and commercial operations.

However, Trump is pushing for "some very strong" change to help the bank sector.

"We want strong restrictions, we want strong regulation. But not regulation that makes it impossible for the banks to loan to people that are going to create jobs," the president told a group of about 50 business leaders at a White House meeting.

"We're going to be doing things that are going to be very good for the banking industry so that the banks can loan money to people who need it."

Trump had promised during his election campaign to relax rules on big banks, and had also ordered a review of the industry's regulations.

According to Michelle Fleury, the BBC's New York business correspondent, Republican policymakers were trying to see how they could pay for tax cuts.

"The banks got so restricted," Trump told the executives yesterday. "We want strong regulation, but not regulations that make it impossible for banks to lend money to people that are going to create jobs."

Commentators point out that though overhaul of some parts of the law might be warranted, the slowdown in bank lending could not be attributed to the law.

They point out that following the law taking effect in July 2010, bank lending to businesses and consumers had continued to hit new highs.

According to former Massachusetts Congressman Barney Frank, the Democrat who co-sponsored the law, only one provision in the more than 850-page law directly restricted lending.

"It's one that says, 'Please don't lend money to poor people, you can't lend money to poor people who can't pay you back for their mortgages," he told CNBC earlier this year. "Literally, that restriction on irresponsible subprime mortgages is the only lending restriction."