NEW YORK (TheStreet) -- With President-Elect Donald Trump getting ready to take office in January, bank stocks are getting a boost due to the prospect his administration will decrease regulation. Trump has been in favor of softening regulation across several industries and has been vocal about his disapproval of the Dodd-Frank Act and its impact on smaller banks particularly.

Former FDIC Chair Sheila Bair believes in the thesis that less regulation is the best regulation. Bair appeared on Monday morning's "Squawk on the Street" on CNBC to discuss regulating the financial sector.

"We need smart regulation, we don't need no regulation, we do need smart regulation," Bair said. "This simpler, shorter, more direct rule that gets to the core of a problem is always much better than this quite extensive labyrinth of thousands of pages of rules that a lot of the incremental benefit is far from clear."

As the interview progressed, Bair began to discuss interest rates and the Fed. It has been speculated for most of 2016 that the Central Bank will increase interest rates in December. Although with Trump's surprise victory over Hillary Clinton in the election, market watchers are unsure if the Fed will move next month.

Bair has never been one for low interest rates and has argued that the best thing for Congress to do is to have some fiscal stimulus to counter any negative impacts higher rates may have on the economy.

"We may be in that sweet spot now, with Mr. Trump coming in, doing hopefully smarter regulation, lowering top rates. Hopefully in a smart way and he's closing loopholes at the same time," Bair said. "Infrastructure spending, which I've long advocated for. ... I think the stimulus he can provide with his program to counter getting out of very low interest rates could be a very huge plus."

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