US banks to gain from looser capital, merger policies under Trump
The banking industry is expected to win big as former President Donald Trump returns to the White House, ushering in Republican regulators who are expected to ease capital rules and merger approvals, industry experts and analysts said, News.Az reports citing Investing .
The President-elect's picks are likely to further dilute the contentious Basel III endgame proposal aimed at requiring big lenders to hold more capital to safeguard against soured loans.
While banks have already won major concessions on that proposal which they say will crimp lending and hurt the economy, the latest draft would still increase capital requirements by around 9% for the largest lenders, according to a top Fed official.
"The Basel endgame rule could be completely dead," said Gene Ludwig, a former top bank regulator who advises financial institutions as CEO of Ludwig Advisors.
The regulatory shift could bring some relief to investors after a year in which some bank stocks were weighed down by concerns over deteriorating loans.
First unveiled months after the collapse of three regional lenders last year, the Basel proposal faced intense pushback and an unprecedented lobbying campaign from big banks, which argued the rules would erode their competitive edge.
The Federal Reserve agreed to water down the proposal in September, when Vice Chair for Supervision Michael Barr said the regulator would overhaul and re-issue the rules later.
Other planned rules requiring banks to hold more debt, as well as changes to liquidity regulations, may also be in doubt.
The President-elect's picks are likely to further dilute the contentious Basel III endgame proposal aimed at requiring big lenders to hold more capital to safeguard against soured loans.
While banks have already won major concessions on that proposal which they say will crimp lending and hurt the economy, the latest draft would still increase capital requirements by around 9% for the largest lenders, according to a top Fed official.
"The Basel endgame rule could be completely dead," said Gene Ludwig, a former top bank regulator who advises financial institutions as CEO of Ludwig Advisors.
The regulatory shift could bring some relief to investors after a year in which some bank stocks were weighed down by concerns over deteriorating loans.
First unveiled months after the collapse of three regional lenders last year, the Basel proposal faced intense pushback and an unprecedented lobbying campaign from big banks, which argued the rules would erode their competitive edge.
The Federal Reserve agreed to water down the proposal in September, when Vice Chair for Supervision Michael Barr said the regulator would overhaul and re-issue the rules later.
Other planned rules requiring banks to hold more debt, as well as changes to liquidity regulations, may also be in doubt.
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