Two of Australia's top financial regulators and a senior Reserve Bank official have warned of unintended consequences and market chaos resulting from Donald Trump's ascent to the White House.
Australian Securities and Investments Commission chairman Greg Medcraft told a lunch in Melbourne that President-elect Trump's plan to dismantle the Dodd-Frank Act could have an impact on Australian markets.
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Carl Icahn says the Trump win is a "major step in the right direction" for the US economy.
"It's one thing standing for election and putting up proposals but when you're in government you have to look at the unintended consequences," Mr Medcraft said.
"It probably means taking on more risk in the financial system but you've got to weigh that up."
Dodd-Frank was passed into law in 2010 after the global financial crisis revealed the cowboy antics of many financial services firms. It provides for much tougher regulation for financial institutions.
On Friday, Mr Trump's official transition website released a statement saying: "The Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation."
Mr Trump's plans to repeal the Dodd Frank Act fuelled the price of bank stocks in the US and in Australia. On Friday, the ASX 200 Financials index rose 2.86 per cent to 6,099.90.
Reserve Bank of Australia deputy governor Guy Debelle said it was too soon to say what a Trump victory would mean for global interest rates.
Mr Debelle said the RBA was yet to change its position on monetary policy after Tuesday's US election and Mr Trump's promise to fuel growth in US financial markets through fiscal stimulus and, in turn, higher interest rates.
"There's a difference between what you say and what you actually do," Mr Debelle said. "Until you get into office, I think we're going to have to wait and see.
"[Mr Trump's fiscal policy] will probably be somewhere else next week. Let's see what happens. Almost every possible position has been put forward in the past 12 months."
The chairman of Australia's banking regulator, the Australian Prudential Regulation Authority, Wayne Byres, said markets would continue to bounce around throughout the Trump presidency because of inconsistent policy statements.
"It's hard to see what the plan is at this point. And the only thing that we can be certain of is there will be more volatility," Mr Byres said.
"I think it's just far too early to say anything other than there's a significant probability there will be some regulatory reform."
Mr Byers said there were key differences between the US and Australian markets in terms of regulation, particularly of banks, with the US having a greater emphasis on bank "stress testing".
"It depends on whether they change and what they change," Mr Byres said.