Federal Reserve Vice Chairman Stanley Fischer warns that President Donald Trump's changes to bank reforms could be “very dangerous” to the entire financial infrastructure.
Fischer issued strong caution against changes to the Dodd-Frank banking reforms implemented after the financial crisis.
"We seem to have forgotten that we had a financial crisis which was caused by behavior in the banking and other parts of the financial system and it did enormous damage to this economy," Fischer told CNBC. "Millions of people lost their jobs, millions of people lost their houses," he said.
"The strength of the financial system is absolutely essential to the ability of the economy to continue to grow at a reasonable rate, and taking actions which remove the changes that were made to strengthen the structure of the financial system is very dangerous," he added.
Trump is poised to order the Treasury to find and reduce tax burdens and review post-financial crisis reforms that banks and insurance companies have said hinder their ability to do business, Reuters reported.
A White House official said on Thursday that Trump will issue an executive order directing the Treasury on the tax issues. He will also issue two memoranda asking for reviews of two parts of the 2010 Dodd-Frank Wall Street reform law - the Orderly Liquidation Authority that sets out how big banks can wind down during a crisis and the Financial Stability Oversight Council (FSOC), which is made up of the country's top regulators.
Meanwhile, Fischer also said he still believes the central bank is on track for three rate hikes this year.
"We're feeling that way and so far haven't seen anything to change that," he said. "But we are dependent on what happens in the economy, and we're not tied to three."
Fischer discounted any fears about slow economic growth.
© 2017 Newsmax Finance. All rights reserved.