The Trump financial risk premium returns
Deregulation in Trump's first term contributed to bank collapses. Will the new administration's zeal heighten financial sector risk? And what does his return mean for private credit and crypto?
Two of the biggest financial crises this century — including the biggest in 2008 — were exacerbated by US deregulation pushed by vested interests.
The global financial crisis was fanned by the dismantling of key provisions of the Glass-Steagall Act, which had separated retail and investment banking. And the failure of Silicon Valley Bank (SVB) last year came after post-financial crisis Dodd Frank Act provisions were unwound in the first Trump administration.
An obvious question then is, what will the rush into deregulation that Donald Trump wants in his second term sow? And what are the implications for Australia?
The full agenda — and reality of — deregulation in financial services is unclear, but several key proposals outline the focus of the new regime. It is broad. And most profoundly it is impacting regulators directly.
