Fed’s Evans defends Wall Street reforms, invokes mother-in-law

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By Ann Saphir

<span class="articleLocation”>Chicago Federal Reserve President Charles Evans
on Friday defended the sweeping Wall Street reforms that U.S.
President Donald Trump wants to rethink, saying they are helping
protect against a new financial crisis.

“I think that many of the things that we’ve been able to
achieve have been extremely helpful for better ensuring
financial stability,” Evans told reporters after a fundraiser
for Prairie State College in Olympia Fields, Ill. “I think the
more and better capital of the banking industry has been
extremely useful.”

Trump on Friday plans to order a review of the Dodd-Frank
Wall Street reforms, with an eye to rolling back regulations he
sees as slowing the economy. Fed Chair Janet Yellen
has resisted any weakening of the bank rules, though she has
also said that some changes could be made to reduce the
regulatory burden on small banks.

Evans also pushed back against changes that could undermine
consumer protections. Trump plans on Friday to ask the Labor
Department to determine if a rule requiring brokers to act in
their clients’ best interest should be revised or scrapped
altogether.

“I think it’s very important that consumers be afforded the
appropriate protection, things like investment advice,” Evans
said.

He recounted how his 88-year-old mother-in-law called him
after a visit to her bank where she was informed about “some
kind of product, she calls me, and I go, ‘oh for God’s sakes,
why is that being put in front of her?'”

Dodd-Frank is a big package of rules and it should not be
surprising that some adjustments need to be made, Evans said.

“I think smoothing out a bit of the regulatory burden, so
that it’s balanced with the risks, so we can make some smart
adjustments, like I say, I think that the Fed and other agencies
have been working to do that,” he said.

But some rules can’t be nixed, he added. “While I’d like to
think that everybody is just an upstanding law-abiding person,
there’s a lot of nefarious activity and potentially terrorist
activity.”

On the monetary policy front, Evans said he “could be
comfortable” with three rate hikes this year, given the strength
of the labor market and his optimism on inflation.

But he also stuck to his call for slow rate hikes, calling
Trump’s plans for fiscal stimulus a “good thing” for the economy
but noting the need for stronger growth as a buffer against a
future downturn.



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