A bipartisan bill to loosen financial regulations could lead to job cuts at big banks, CNBC’s Jim Cramer argued on Thursday.
The bill, which was approved by the United States Senate on Wednesday, marks the first attempt to rewrite the Dodd-Frank Act that was put in place in response to the 2008 financial crisis.
It targets regulations that bankers found the most “onerous,” Cramer said.
“That could be a big win for the banks,” the “Mad Money” host said, noting that shares of the big financials lifted on news of the Senate passage.
“However, what matters far more for the banks is the way the regulators treat them, and at least within this administration, the regulators are about as friendly as it gets,” Cramer said.
“There have been so few cases brought by any agency against any bank that I keep expecting to hear about big layoffs in the compliance and legal departments of these institutions,” he added.
The Republican-led legislation, which would alter the standards for banks considered to be “too big to fail,” would also make lending easier for financial institutions.
But for Cramer, any kind of loosened regulation — critics aside — would mean good things for the stocks of U.S. financials.
“I think the bank stocks are therefore among the cheapest groups in the market and every time they come down you’ve got to tell yourself that the light touch of these new regulators will mean higher earnings down the road for certain.”
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