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Former Rep. Barney Frank (D-Mass.) (L) and former Sen. Chris Dodd (D-Conn.) talk about their hallmark and namesake legislation, the Dodd-Frank Wall Street reform law, on the fifth anniversary of the law at the Newseum July 20, 2015, in Washington.
Meanwhile, Gnodde took a broadly positive view of the political and economic situation in the U.S.
“The narrative remains all about growth, job creation, infrastructure spending…I suspect in reality the machinery of government will continue to grind on and a lot of these initiatives will actually end up being enacted and we’ll have a growth-oriented economy which of course is good for everybody. It’s good for employment, it’s good for wealth creation, in the end it’s good for our business,” Goldman Sachs’ long-standing senior executive affirmed.
Gnodde’s comments on Dodd-Frank came just as William Dudley, President of the New York Fed, told an audience in London that banks have “a long way to go” to reform internal culture and that performance incentives are still a problem within the industry.
Acknowledging Dudley’s concerns, Jim McCaughan, chief executive officer (CEO) of Principal Global Investors, told CNBC’s Squawk Box that these points were valid.
“It would be undesirable just to repeal Dodd-Frank and leave nothing in terms of regulation to ensure market conduct. Free markets need a bit of rails to put the train on. They need some sort of rules of conduct which ensure transparent markets,” he opined.
Expressing no surprise that Barclays’ CEO Jes Staley had recently told CNBC that he did not think that Dodd-Frank should go, McCaughan said that “banks have got used to operating with it so that makes some sense.”
“Any change in regulation causes businesses disruption and effort, even if that’s lessening regulation. So the deregulation story is not really the key part in the near term of the Trump trade.”
