In a recent opinion article published in Banking Risk and Regulation, Monsur Hussain, Head of Research for Global Financial Institutions at Fitch Ratings, predicts that an emphasis on deregulation in the US will drive global regulatory and risk management trends in 2025.
President-Elect Donald Trump, who will take office later this month, has made clear that removing burdensome regulations and cutting red tape will be a key priority of his administration. This will likely include the delay and/or dilution of the "Basel Endgame" capital requirements in the US, as well as a review of the bank capital framework.
"While this could free up financial institutions, it risks sparking criticism for prioritising growth at the expense of stability," Hussain warns. Deregulation may ease compliance burdens, he adds, but it could also potentially undermine global financial safeguards.
However, others have expressed skepticism as to exactly how extreme US deregulation will be. In remarks delivered at the annual Goldman Sachs Financial Services Conference last month, PNC CEO Bill Demchak said that people have gotten "a little bit too excited" about forthcoming deregulation. While regulation and supervision will likely get softer "at the margin," Demchak argued, the reforms are unlikely to "let everybody run free."
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