Trump Banking Review Raises Fears for Global Standards Talks - ABI

President Donald Trump's review of post-crisis banking rules could sound the death knell for new global standards now being finalized and rip apart a common approach to regulating international lenders, bankers and regulators said, Reuters reported yesterday. Central banks and watchdogs around the world have spent the past eight years drawing up regulation aimed at preventing a repeat of the 2007-2009 financial crisis, but there are fears that project could unravel after Trump said that he wants the U.S. to dial back on capital rules. Trump's order for a regulatory review to overcome what he sees as obstacles to lending came as banking watchdogs were trying to complete the final piece of global capital requirements, known as Basel III. Given that the U.S. wants to shrink the banking rule book, there are doubts over whether the Basel rules can make it over the finish line next month if they don't have backing from the U.S. The core aim of the outstanding part of Basel III that regulators are working on — dubbed Basel IV by critical banks who worry about more stringent capital requirements — is to impose more consistency into how banks calculate the amount of capital they hold against risky assets like loans.

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