US vice-president Joe Biden has warned against a proposed repeal of financial legislation, saying the policies that caused the 2008 recession are the same as those being put forward by the incoming administration.
Speaking at Georgetown University on Tuesday, Biden said “we can’t allow the repeal of Dodd-Frank” and “we can’t go back to the days when banks were free to take risks with depositors’ money”.
He added the role of the Dodd-Frank Act in maintaining financial stability was underappreciated, and said the incoming administration would be wise to carefully examine existing agencies and regulations before trying to eliminate them.
Co-speaker Paul Volcker, the former Federal Reserve chairman, added his support and urged the new administration not to undo regulations put in place since the 2008 financial crisis. “We don’t want to repeat that experience,” he said.
The incoming Trump administration and Congressional Republicans have vowed to roll back much of the 2010 Act’s regulation and to limit the powers of the Consumer Financial Protection Bureau. This would include the Volcker Rule – which states banks may only hold 3 percent of their tier 1 capital in private investments – and which has driven many institutions to secondaries sales.
Last week, president-elect Donald Trump’s nominee for Treasury secretary Steven Mnuchin said he would attempt to “strip back” Dodd-Frank, which he deemed too complicated.