The European Central Bank is concerned that the Trump administration's plans to loosen bank regulation in the United States will endanger global financial stability, a top official said Wednesday. "I find the most recent proposals by the Department of the Treasury worrying. It looks as if elements of the global reform might be postponed or not even implemented," ECB supervisory board vice-chair Sabine Lautenschlaeger told a conference in Bonn.
"Purely national initiatives will not improve the stability of the financial system, quite the opposite," she added. Earlier this month, the Department of the Treasury presented a roadmap to less stringent regulations, saying that it represented a "sensible rebalancing" of the rules in response to a stronger economy.
Its proposals would see less frequent regulatory stress tests - which measure how banks would weather possible economic shocks - for a smaller number of only the very largest institutions. And it would water down measures put in place after the financial crisis to protect consumers of financial products and bank depositors.
Meanwhile, the US and European nations remain deadlocked in the so-called "Basel III" round of global talks on banking regulation.
The US is pushing for tougher rules on how banks judge the riskiness of assets they own, in the face of resistance from European heavyweights France and Germany.
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