Belfast Telegraph

Bank shares soar with Donald Trump poised to ease regulations on sector

Bank shares have soared after US President Donald Trump signalled he would tear up regulations put in place after the financial crisis to better police the sector.

Mr Trump plans to sign an executive order on Friday demanding a review of the 2010 Dodd-Frank financial oversight law, which aimed to rein in reckless financial firms following the 2008 banking crisis.

The billionaire has dubbed Dodd-Frank a "disaster" and said he could repeal and replace the law, which also created the Consumer Financial Protection Bureau (CFPB).

Barclays, which has a US investment banking operation, was up more than 3% on the London Stock Exchange during lunchtime trading, while Royal Bank of Scotland climbed around 2%.

Jasper Lawler, senior market analyst at London Capital Group, said: "Since Dodd Frank was introduced, banks have devoted a lot more capital towards compliance and have had to decrease leverage, both of which are a direct hit to profitability.

"If Dodd Frank is watered down, that's a direct boost to the bottom line for banks."

The Trump administration has argued Dodd-Frank has not achieved its purpose and is an example of government over-reach.

While the order will not have any immediate impact, it will direct the Treasury secretary to consult with members of different regulatory agencies and the Financial Stability Oversight Council and report back on potential changes.

It may include a review of the CFPB, which vastly expanded regulators' ability to police consumer products, from mortgages to credit cards to student loans.

It came as Ben Broadbent, the deputy governor of the Bank of England, said Mr Trump's election victory had been marginally positive for the British economy.

The president has pledged to slash taxes and ramp up infrastructure investment in a raft of measures designed to turbo charge America's manufacturing industry.

"You've seen business confidence rise particularly in the United States. You've seen financial markets get more optimistic and I think that has had some impact on us," Mr Broadbent said.