We have been covering this story for a few months and today developments took a dramatic turn in terms of what a Trump version of Glass-Steagall might look like. Generally, it appears that investors should not worry all that much as the administration will not seek to actually split investment banks from retail banks. Treasury secretary Steve Mnuchin does not support doing so, as he told Congress yesterday, saying “We do not support a separation of banks from investment banks”. Doing say would create problems for “financial markets, on the economy, and liquidity”.
FINSUM: While rhetoric and reality can sometimes be far apart, this seems to be a clear statement that the administration won’t tear banks apart. Investors can breathe a small sigh of relief.
Source: Wall Street Journal