The U.S. financial regulatory system is a labyrinth of overlapping, duplicative, dysfunctional, and costly federal government agencies badly in need of fresh review and overhaul. With the possible exception of the healthcare industry, there is perhaps no business sector more heavily regulated in the United States than the financial sector.

 
Diagram credit to the U.S. Department of Treasury report, ‘A Financial System That Creates Economic Opportunities’ June 2017, page 29.
The diagram above of federal financial regulators and their oversight responsibilities succinctly shows the overly complicated nature of the U.S. financial regulatory system. But big changes may be coming to this long-standing regulatory mess after the new Trump administration takes office next month.
According to a Wall Street Journal article on December 12th, the Trump transition team is exploring ways to dramatically downsize, consolidate, or even abolish some federal financial regulatory agencies. Excerpts from the WSJ article:
In recent interviews with potential nominees to lead bank regulatory agencies, Trump advisers and officials from his newfound Department of Government Efficiency have, for example, asked whether the president-elect could abolish the Federal Deposit Insurance Corp., people familiar with the matter said.
Advisers have asked the nominees under consideration for the FDIC, as well as the Office of the Comptroller of the Currency, if deposit insurance could then be absorbed into the Treasury Department, some of the people said.
Any proposal to eliminate the FDIC or any agency would require congressional action. While past presidents have reorganized and rebranded departments, Washington has never shut down a major cabinet-level agency and rarely closed other agencies like the FDIC that are not.
The discussions underscore the drastic approach Trump could take in his attempt to slash the size of the government and ease oversight, including for the highly regulated financi...