In the wake of the economic crash a decade ago, Congress and the Obama White House created a series of new safeguards, layers of accountability, and agencies intended to prevent future crises. One of them was something called the Office of Financial Research (OFR), which has been described as the Treasury Department’s “eyes and ears,” studying financial markets looking for emerging vulnerabilities.
Last year, Donald Trump announced plans to slash the office’s budget and make significant changes to its structure. Reuters reported yesterday on the nature of those changes.
The Trump administration moved on Wednesday to shrink a government agency tasked with identifying looming financial risks, notifying around 40 staff members they would be laid off, according to a person familiar with the changes.
The employees at the Office of Financial Research (OFR) were formally told on Wednesday they will lose their jobs as part of a broader reorganization of the agency that was created in the wake of the 2007-2009 global financial crisis, the source said. […]
Consumer advocates say the bureau provides a critical function by gathering data on areas such as banking, lending and trading from the country’s complex web of federal and state regulators to provide a bird’s-eye view of system-wide risks.
The trouble is, if OFR officials identified emerging risks, that would likely lead to calls for some kind of regulatory action in financial markets. The Trump administration has given every indication that it opposes such intervention — making those who might ring the alarm expendable.
This comes on the heels of the Trump administration slashing the budget and staff of the Financial Stability Oversight Council, which was also created in the wake of the Great Recession, and neutering the Consumer Financial Protection Bureau. On the other end of Pennsylvania Avenue in D.C., congressional Republicans have also invested quite a bit of effort into rolling back Dodd-Frank reforms. Matt Yglesias noted last year, “Meanwhile, Trump’s pick to run regulatory policy at the Fed wants to let banks take on more risky debt. He’s tapped a bank executive responsible for all kinds of shady foreclosure practices to run the Office of the Comptroller of the Currency.” Matt added, “You would not think that just 10 years after a massive financial crisis the American government would be moving aggressively to dismantle prudential regulation of the banking system. But that’s what they are doing here.”
Steve Benen is a producer for "The Rachel Maddow Show," the editor of MaddowBlog and an MS NOW political contributor. He's also the bestselling author of "Ministry of Truth: Democracy, Reality, and the Republicans' War on the Recent Past." Recommended
