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President-elect may save banks billions

Bloomberg LONDON (Bloomberg) — The election of Donald Trump may allow banks to dodge the full impact of global regulators’ post-2008 crisis crackdown.

The Basel Committee on Banking Supervision is racing to complete a revamp of international capital standards by year-end. The United States has pushed for strict rules to protect against future market meltdowns, whereas Europe and Japan want to rein in proposals that could hit banks with billions in costs.

Basel Committee members, including the U.S. Federal Reserve Board and the European Central Bank, are under enormous industry pressure to soften the rules.

Trump’s ascendancy and his vow to dismantle financial regulations could throw another wrench in the works. If he stalls U.S. implementation of the revised Basel Committee standards on how banks measure asset risk, or ignores them altogether, Europe could follow suit. And if the United States and Europe go their own ways, the last piece of the global response to the financial crisis could be undermined.

“I think that before Trump, Basel was going to be softened down significantly,” Sam Theodore, managing director for financial institutions at Scope Ratings AG, said in an interview. “And now with Trump, I think the whole thing is going to become more of a symbolic exercise.”

The memory of the crisis is fading, and “you have all the ingredients for the anti-regulation backlash to continue,” he said.Speech

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