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REPUBLICAN and Democratic Senators have voted to scrap a set of financial regulations brought in after the 2008 bankers’ crash meant to ward off a repeat of the crisis.
They voted by 67-31 on Wednesday night to approve Republican Senator Mike Crapo’s Bill, which repeals and relaxes portions of the so-called Dodd-Frank rules that have been the target of relentless lobbying by big banks and other financial firms.
Mr Crapo’s Bill increases the threshold over which banks are subject to increased scrutiny from regulators from $50 billion (£35bn) to $250bn (£179bn) in assets, among other changes.
Bank lobbyists and President Donald Trump have said this is necessary to support community banks.
However, the vast majority of the 5,000 mostly small banks in the US already fly under the Dodd-Frank limit, and the $250bn threshold will let transnational giants including Deutsche Bank, Barclays, Credit Suisse and Santander all off the hook.
They will also be excused from creating “living wills” — a plan for banks to safely dispose of assets if they fail.
Mr Crapo’s allies also say it is necessary to increase lending to small businesses, despite reports by the US Federal Reserve central bank showing that nearly all have easy access to credit and those denied it are generally unsound.
Analysis by the Congressional Budget Office said that the Bill would make it more likely that large banks will fail and require public-sector bailouts to avoid a systemic collapse, as happened in 2008.
“This Bill wouldn't be on the path to becoming law without the support of these Democrats,” blasted Senator Elizabeth Warren, branding it the “Bank Lobbyist Act.”