Wendy Edelberg

Essentially that banks don't take too many risks and blow up our economy in the process.

Allen says that includes setting capital requirements for banks, also running stress tests to ensure banks can handle a downturn.

They go in and they examine banks.

They look at what kinds of assets they're investing in.

They look at how they're funding their investments.

They look at how banks are managing their liquidity.

The goal here is to ensure that the banking system is resilient, says Catherine Judge, a professor at Columbia Law School.

So that way we have a financial system that's able to provide...

the credit and services that everybody needs today, but it will also be in a position to provide that credit and those services when things go wrong.

Judge says regulations can impose costs on banks.

That's why she says regulatory independence is important.

But if the Federal Reserve were to lose that independence?

You could imagine a future scenario where a president says, look, I'm going to try to remove a governor who was appointed and

by somebody from the other political party.

But I'm not doing it because I disagree on monetary policy.

It's that this person is furthering a regulatory agenda with which I fundamentally disagree.

Judge says there are several factors that have been eroding regulatory independence already.

Hillary Allen at American University says the Federal Reserve has taken steps that align with the Trump administration to roll back regulations.

We've seen a commitment to cut supervisory and regulatory staff at the Federal Reserve by 30%.

Allen says if the Fed were to lose its independence, she'd expect even more regulatory rollbacks.