Trump Could Cause Global Financial Crisis, Warns ECB Head

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.

Share!Tweet about this on TwitterShare on FacebookShare on LinkedInEmail this to someonePrint this page

During a Feb. 6 hearing in the European Parliament, the head of the European Central Bank issued a dire warning about President Trump’s latest moves to repeal Dodd-Frank’s Wall Street reforms.

President Trump’s actions are “exactly the ground on which the financial crisis developed,” said ECB President Mario Draghi.

The regulations President Trump wants to deplete are aimed at keeping “too big to fail” banks from sparking a repeat of the 2007-2009 financial crisis.

“Frankly, I don’t see any reason to relax the current regulatory stance which has produced a much, much stronger banking – and, generally, financial services – industry than we used to have before the crisis,” said Draghi.

He added that more clarity was needed on what exactly President Trump plans to do pertaining to deregulation. On Friday, Trump directed the U.S. Treasury to look for potential changes in the law’s provisions.

The European leader also responded to the scathing allegations set forth by Trump’s head of the National Trade Council, Peter Navarro

Draghi Defends Germany

Navarro claimed that Germany is using what he called a “grossly undervalued” euro to “exploit” its trading partners in an exclusive with The Financial Times on Jan. 31.

Draghi fiercely rejected these claims.

“[Germany] has not engaged in persistent, one-sided intervention in foreign exchange markets,” claimed Draghi. “We are not currency manipulators,” he added.

Draghi argued Germany’s large trade surplus was based on economic competitiveness, not currency advantage.

In fact, German politicians and German members of the ECB’s board have agitated in vain for a higher interest rate policy that would likely have strengthened the euro, VOA reported on Feb. 9.

Draghi claimed that ECB implemented a stimulus that actually lowered the euro, and those policies were carried out solely to boost the lagging economy in Europe, not for currency advantage.

“The monetary policies that we have conducted reflect the different stage of the cycle in the Eurozone and the United States,” said Draghi.

 

To get full access to all Money Morning content, click here

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

Disclaimer: © 2017 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.

 

The post Trump Could Cause Global Financial Crisis, Warns ECB Head appeared first on Money Morning – We Make Investing Profitable.

Wall Street Examiner Disclaimer: The Wall Street Examiner reposts third party content with the permission of the publisher. I curate these posts on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. In some cases promotional consideration is paid on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler and no endorsement of the content so provided is either expressed or implied by our posting the content. The Wall Street Examiner makes no endorsement or recommendation regarding them. Do your own due diligence when considering the offerings of third party providers.

0 comments