A top Trump administration financial regulator said Wednesday that tough bank capital requirements should be "recalibrated" as part of a regulatory pullback in order to boost economic growth.
J. Christopher Giancarlo, tapped by Trump on Tuesday to serve as chair of the Commodity Futures Trading Commission, also said regulators had gone too far in putting restrictions on financial derivatives after the 2008 financial crisis.
"Today, America's derivatives markets are struggling, in some cases, under the weight of flawed and excessive regulation," Giancarlo said in an address to a futures industry conference in Boca Raton, Florida.
Strict capital requirements on banks after the 2008 financial crisis were emblematic of the heavy-handed approach and needed to be rethought, said the official, who has been a member of the commission since 2014, but will require Senate confirmation to take the agency's top job although he currently serves as acting chair.
Supporters of the requirements say they are necessary to safeguard the financial system and prevent the excesses that led to the crisis, but large banks gripe that the limits have boxed them in and restricted their ability to return cash to shareholders.
Giancarlo said the rules were misguided because they heightened liquidity risk.
The CFTC focuses on derivatives but also has a hand in overall financial regulation through the joint Financial Stability Oversight Council, which also includes the Federal Reserve, Treasury and other regulators.
"The time has come to recalibrate bank capital requirements to better balance systemic risk concerns with healthy economic growth and American prosperity," Giancarlo said.
He also launched what he labeled as "Project KISS," for "keep it simple stupid," an initiative to simplify new rule implementation to be led by CFTC chief of staff Mike Gill, who also will have the title of "Regulatory Reform Officer."
Giancarlo also established a chief market intelligence officer to report directly to the chairman in an effort to set more future-oriented policies.