Goldman’s Solomon Is Confident Trump Will Roll Back Bank Rules

The financial sector is bracing for a potential seismic shift in regulation under President Donald Trump’s second term, with Goldman Sachs CEO David Solomon emerging as one of the most vocal proponents of rolling back post-2008 financial crisis rules. In a series of recent remarks, Solomon has framed regulatory easing as a near certainty, emphasizing that the administration’s deregulatory push could unlock significant growth opportunities for banks.

The Regulatory Rollback Playbook

Solomon’s optimism hinges on two key developments: the nomination of Michelle Bowman as Vice Chair of Supervision at the Federal Reserve and the Trump administration’s broader agenda to dismantle what it views as overly restrictive banking rules. Bowman, a Trump appointee and vocal critic of stringent capital requirements, has already drawn praise from Solomon, who called her potential ascension “exciting for the industry” during a recent earnings call. Her opposition to proposals like the 3% surcharge on large banks under former Fed official Michael Barr’s plan positions her as a pivotal figure in reshaping the regulatory landscape.

The CEO’s confidence is also rooted in Trump’s explicit focus on deregulation. Since taking office again in 2025, the administration has prioritized revisiting Basel III capital rules, which require banks to hold more capital against potential losses. Solomon has framed these requirements as a drag on lending and economic growth, arguing that easing them would allow institutions like Goldman Sachs to deploy capital more freely.

The market appears to share this optimism. Goldman’s shares have outperformed the broader market since Trump’s re-election, rising 22% year-to-date as of April 2025, while the S&P 500 financial sector index has gained just 10%. This divergence suggests investors are pricing in regulatory tailwinds for banks.

The Capital and Liquidity Pivot

At the heart of Solomon’s push is a desire to reduce capital and liquidity buffers, which he argues are excessive for firms like Goldman Sachs. During an April earnings call, he emphasized the need to “appropriately calibrate” regulations, a phrase that doubles as a veiled critique of current oversight. The CEO’s comments align with Bowman’s stance, which includes revisiting the “supervisory capital surcharge” for systemically important banks. If successful, such changes could free up hundreds of billions of dollars in capital for lending or shareholder returns.

The stakes are high. Banks currently hold roughly $2.5 trillion in capital above pre-crisis levels, a buffer critics argue is now excessive given the sector’s stability. Bowman’s potential reforms could cut this by 10–15%, according to estimates from banking analysts.

Risks and the Global Context

While Solomon frames regulatory easing as a growth catalyst, risks loom. A weaker regulatory framework could expose banks to cyclical downturns, and Bowman’s appointment faces opposition from consumer advocacy groups. Additionally, Trump’s broader policies, such as trade tariffs (though Solomon avoids naming them), have created uncertainty for global banks.

Yet Solomon’s confidence is bolstered by the administration’s record. Since 2025, the Trump White House has already overturned nearly 40% of financial regulations enacted under prior administrations, including restrictions on derivatives trading and mortgage lending. With Bowman in place, Goldman and peers like JPMorgan Chase (JPM) and Citigroup (C) stand to gain the most from a lighter touch.

Conclusion: A Regulatory Reset for Banks?

The data paints a clear picture: Goldman Sachs and the broader banking sector are betting heavily on regulatory rollbacks under Trump. With Bowman’s nomination advancing and Solomon’s public advocacy, the path toward eased capital rules and reduced oversight is narrowing.

If successful, this shift could boost bank profitability by 10–15%, according to Goldman’s internal estimates, as reduced capital requirements allow for higher dividend payouts or strategic investments. However, the long-term implications remain contentious. A return to pre-2008 risk-taking could destabilize the system, a trade-off investors will need to weigh carefully.

For now, Solomon’s optimism is resonating with markets. As he put it: “The goal is to ensure we’re not over-regulated to the point where we can’t support the economy.” Whether that balance is achievable—or sustainable—will define the next chapter for U.S. banking.