Question

The proposed policy action of the Trump administration to dismantle the Dodd-Frank legislation to regulate the financial sector is an act of deregulation of that sector. Present three (3) economic costs and three (3) economic benefits of a policy of deregulation of the financial sector in the US

Answer 1

The Dodd-Frank legislation was introduced in 2010 after the financial crisis of 2008. It makes reforms in all financial sectors that cause crisis in 200.It instructed banks to maintain reserves for emergency and asked for complete shutdown in case of insolvency .

President Trump introduced a new policy against Dodd-Frank legislation. According to him, Dodd policy was not good for American economy. It reduced the access to credit and increases the burden of American business man. Trumph on the other hand make credit policy easier. He also made new laws related to immigrants.

Economic cost included in this policy :

1.Deportation cost could go as high as 60 billion dollar but the immigrants contribute more than 28 billon dollar to the economy  

2.The cost of immigrants is more to the government approximately 11.4 to 20.2 billion dollar which is less for native Americans with sane education and work.

3.Us has decided to grant illegal immigrants amnesty thus their cost to the society will be double.

Economics benefits of the policy:

1. It raises the threshold limit to 250 billion dollar from 50 billion dollar. It increases the importance of banks in the financial system which failure of banks plays a very important role in financial system of the country.

2.Banks need not to submit safety valves or security which they earlier needs to submit for financial disasters

3.It also simplifies the process of mortgage loan data requirement.

Thus it will safeguard students loan borrowers. It also made credit agencies to provide free credit related services