The US Treasury Secretary stated that regulatory reforms implemented under former President Donald Trump’s administration will enhance banks’ lending capacity, thereby strengthening the financial system. These reforms are expected to enable banks to extend approximately $2.5 trillion in additional loans, playing a crucial role in economic recovery. The Secretary also cautioned about the reliance on private lending during economic downturns, noting that this trend often fluctuates with economic cycles. He explained that the growth of private debt is linked to stringent regulatory frameworks imposed on the banking sector, which have made financial institutions more cautious and limited loan supply, increasing the importance of private lenders. The regulatory reforms aim to make financial institutions more stable and transparent, enabling them to remain resilient during economic crises and provide easier access to credit for consumers. These measures are considered essential for ensuring financial stability and mitigating the impact of potential financial crises. Experts believe that while these reforms will help strengthen the banking system, their implementation and effects will become clearer over time. Increased lending capacity of banks in the future could promote economic growth, but potential risks and challenges must be managed to maintain balance in the financial system. Additionally, these reforms will improve the performance of the US banking system in global financial markets and stabilize the investment environment, signaling positive prospects for overall economic development.
Source: binance
