The expected rollback in banking regulation under President-elect Donald Trump is "really good" for banks and means the "pond is definitely getting bigger," Cantor Fitzgerald CEO Howard Lutnick said on CNBC's "Squawk on the Street" on Tuesday morning.
A prime example of how regulation hurts banks comes from January 2016, when oil fell off the map and the controller of the currency in the Obama administration made it so that money-centered banks couldn't lend to energy companies, Lutnick noted.
"Can you imagine they just couldn't lend to energy companies because they raised the risk rating and made it so that they had to put so much capital up?" he said.
Going forward, all of that "nonsense" will go away and banks will be able to take the risk if they have the proper amount of money, Lutnick explained. "So I think it's going to be better business for banks period."
Despite being a private firm, Cantor Fitzgerald will also benefit from this trend because banks are going to be reexamining who they're doing business with and will turn away smaller firms that aren't "institutionally important" to it, he claimed.
That's where his firm can step in, so it doesn't even have to compete with banks. Cantor Fitzgerald is in a "sweet spot in the world going forward," he said.