Trump is meeting with an ex-bank CEO who wants to abolish the Federal Reserve and return to the gold standard

With Donald Trump’s time in the White House fast approaching, there’s more and more attention for the many high-ranking positions. On Monday, the newly elected President of the USA will meet with John Allison, former CEO of the libertarian think tank the Cato Institute and the BB&T bank, who is allegedly being considered for Treasury secretary.

During his campaign, Trump has openly been asking questions about the Federal Reserve’s political independence, but considering Allison for the job is taking it a step further. During his time at the Cato Institute, the potential future Treasury secretary wrote to a paper in support of abolishing the Fed. “I would get rid of the Federal Reserve because the volatility in the economy is primarily caused by the Fed,” he wrote in a Cato Institute publication in 2014. He noted that allowing the market to regulate itself might be better that the Federal Reserve’s harming the financial system. “When the Fed is radically changing the money supply, distorting interest rates, and over-regulating the financial sector, it makes rational economic calculation difficult. Markets do form bubbles, but the Fed makes them worse.”

He also suggested abolishing the government’s practice of insuring bank deposits up to $250 000 and turning towards a market standard such as gold. “We should raise capital standards, but it is even more important to eliminate burdensome regulations — including Dodd-Frank, the Community Reinvestment Act, and Truth in Lending. About 25 percent of a bank’s personnel cost relates to regulations. Banks cannot pay the regulatory costs and have high capital standards,” he also wrote.

This view is surely similar to Trump’s desire to roll back regulation, although he has backtracked a bit since his election. It’s still unclear if Allison will become the new Treasury secretary, but given the similar opinion on the Federal Reserve System between the two, the meeting is surely significant.


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