U.S. could rule out most financial regulation, says Greenspan
Economic vigor depends on free capital investment and willingness of corporations to leverage their balance sheets, which have been hurdled by regulation like the Dodd-Frank Act, Greenspan said in a speech before the Economic Club of New York, where he accepted the club's Award for Leadership Excellence.
The Dodd-Frank Act was enacted in 2010 by former U.S. President Barack Obama in response to the 2008 financial crisis.
Under the law, regulators introduced strict capital standards on banks, called for annual stress tests for systemically important banks, and created the Consumer Financial Protection Bureau.
However, U.S. President Donald Trump has already vowed to scale back Dodd-Frank Act, saying the Wall Street reform law is a "disaster" and "horrible" for business vitality.
"Dodd-Frank Act may undergo a major change and it will hopefully cause a fairly important rise in real economic activity," Greenspan said.
The former central banker noted that while eliminating most regulation in the financial system, one thing remains to be done, that is, "to significantly raise the ratio of required regulatory equity capital for financial institutions." ■
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