The top Democrat on the House Financial Service committee said she’s disgusted by Wall Street’s record-breaking week following Donald TrumpDonald TrumpTrump takes shot at new GOP candidate in Ohio over Cleveland nickname GOP political operatives indicted over illegal campaign contribution from Russian national in 2016 On The Money — Dems dare GOP to vote for shutdown, default MORE’s victory in the presidential race.
Rep. Maxine Waters (Calif.) said Wall Street’s boom after Trump’s election, reacting to “a massive, destabilizing, lawless agenda,” was no replacement for broad economic growth.
“I’m appalled that the reaction to Tuesday’s election on Wall Street is record highs for bank stocks,” said Waters on Tuesday. “Short lived increases in the stock market are not the same as real, hard-earned economic growth, and the demise of the regulations Wall Street is cheering are the same regulations that have made our consumers, investors and economy safer and more resilient.”
The Dow Jones industrial index closed at a record high Monday, stretching its best week since 2011 into a six-day winning streak. Despite an initial plummet as votes were counted Tuesday night, stocks have soared since Trump’s election.
Finance and energy stocks have performed the best as traders anticipate deregulation of both industries under the Trump administration.
Those provisions include the Financial Oversight Stability Council’s ability to label banks systemically important financial institutions (SIFI), nicknamed “too big to fail.” That label subjects banks to tougher Federal Reserve oversight, along with stricter capital and stability standards.
Trump would also eliminate Title II of Dodd-Frank, which allows the federal government to take over and liquidate failing financial firms, according to the Journal. The system was created as a means to avoid another federal bailout of crumbling banks.
Waters questioned what Trump would do once he’s sworn into office, slamming his widespread financial entanglements. But she praised his promise to reimpose a firewall between consumer and investment banking, previously in place through the Glass-Steagall Act, which was repealed under President Bill ClintonWilliam (Bill) Jefferson ClintonVirginia governor's race enters new phase as early voting begins Business coalition aims to provide jobs to Afghan refugees Biden nominates ex-State Department official as Export-Import Bank leader MORE.
“Does he mean letting the Wall Street banks he’s so indebted to write their own rules? Does it mean repealing the fair housing laws the Department of Justice sued him over decades ago? Does he want to repeal investor protections and make it harder for the SEC to go after bad actors?” asked Waters. “Does he means breaking up the banks by reinstating Glass-Steagall? In that regard, I’m sure we could find some common ground.”
“I’m curious to see Republicans in Congress will react to this wide-ranging, sometimes progressive agenda,” Waters said.