President-elect Donald Trump’s advisers are openly raising the possibility of the incoming administration breaking up the Federal Deposit Insurance Corp., according to a report, as signs appear that a dramatic deregulation of the finance system is on the way.
The Trump transition team is busy examining ways to strengthen, shrink or even eliminate banking regulators in Washington, D.C., as part of a broader overhaul. According to the Wall Street Journal.
Trump aides who have interviewed potential candidates for key positions at the FDIC as well as the Office of the Comptroller of the Currency have wondered whether deposit insurance could be kept under the purview of the Treasury Department, the Journal reports.
earlier this year, A law firm issued a disappointing report details alleged Mass sexual harassment cases and other misconduct at the FDIC. This report was made in response to revelations cited by the Journal of allegations The agency was a toxic workplace.
Martin Gruenberg, FDIC Chairman, Has said he will step down next month.
Dismantling the FDIC, created during the Great Depression nearly 100 years ago, would require authorization from Congress.
The agency, which operates independently, insures deposits up to $250,000 per depositor.
public Confidence in the banking system shaken in the last two years After the collapse of Silicon Valley BankSignature Bank of New York and First Republic Bank.
The OCC, which was established during the Civil War, is an independent bureau within the Treasury Department, another regulatory body in charge of overseeing the banking sector.
While Wall Street has cheered the prospect of deregulating the banking system, a move that could create the perception that the government is weakening deposit insurance could be potentially dangerous.
George W. Sheila Bair, who chaired the FDIC during the Bush administration, told the Journal that she doesn’t think lawmakers or the banking industry will push to dismantle or shrink the FDIC.
“Banks can complain, but at the end of the day, they like to have their own regulator that they have a relationship with,” Baer said.
“They like the status quo.”
Baer acknowledged that “we could use some streamlining on financial regulation,” although he added that “it’s really hard to do.”
The post sought comment from the Trump transition team.
Trump has relied on the advice of Tesla CEO Elon Musk and former GOP presidential candidate Vivek Ramaswamy — both of whom co-chair an advisory body called the Department of Government Efficiency (DOGE).
According to the Journal, Treasury Secretary-designate Scott Besant and DOGE officials are interviewing potential bank regulators.
Last month, Musk publicly called for the abolition of the Consumer Financial Protection Bureau, the brainchild of Senator Elizabeth Warren (D-Mass.), which was created in the wake of the 2008 financial meltdown.
Sources close to the situation told the Journal that considerations raised during the discussion included a combination of the FDIC, the OCC and the Federal Reserve.
