Advisors to President-elect Donald Trump have publicly raised the possibility that the incoming administration will dissolve the Federal Deposit Insurance Corporation, amid signs that dramatic deregulation of the financial system is on the horizon, according to a report. are.
Trump's transition team is busy considering ways to consolidate, shrink or even eliminate banking regulators in Washington, D.C., as part of its overhaul. According to the Wall Street Journal.
Trump aides who have met with potential candidates for key positions at the FDIC and the Office of the Comptroller of the Currency have voiced doubts about whether deposit insurance can be brought under the jurisdiction of the Treasury Department, the paper said. About.
Earlier this year, a law firm released a damning report detailing widespread allegations of sexual harassment and other misconduct at the FDIC. The report was produced in response to revelations cited by the Journal about allegations that government agencies were toxic workplaces.
FDIC Chairman Martin Gruenberg has announced that he will resign next month.
Repealing the FDIC, which was established during the Great Depression nearly 100 years ago, would require approval from Congress.
The agency is independently operated and guarantees deposits of up to $250,000 per depositor.
Public trust in the banking system has been shaken over the past two years following the failures of Silicon Valley Bank, Signature Bank of New York, and First Republic Bank.
Established during the Civil War, the OCC is an independent bureau within the Department of the Treasury, another regulatory agency responsible for oversight of the banking sector.
Wall Street has welcomed the prospect of deregulation of the banking system, but any move that could create the perception that the government is weakening deposit insurance could be potentially risky.
Sheila Baer, who served as FDIC chair during the George W.
“Banks may complain, but at the end of the day, they want to have their own regulators to relate to,” Baer said.
“They like the status quo.”
“It's possible to streamline financial regulation to some extent,” Baer acknowledged, but added: “It's really hard to do that.”
The newspaper has reached out to Trump's transition team for comment.
President Trump relies on the advice of Tesla CEO Elon Musk and former Republican presidential candidate Vivek Ramaswami, who are co-chairs of an advisory body known as the Department of Government Efficiency (DOGE). is in charge of
The paper said incoming Treasury Secretary Scott Bessent and DOGE officials are meeting with potential banking regulators.
Last month, Musk publicly called for abolishing the Consumer Financial Protection Bureau, an initiative of Sen. Elizabeth Warren (D-Mass.) that was created in response to the 2008 financial collapse.
People close to the situation told the Journal that ideas floated during discussions included combining the FDIC, OCC and Federal Reserve.
