UBS On-Air: Market Moves Top of the Morning: POTUS 47 - Banking on regulatory reform
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Sep 23, 2025 In this discussion, Barry McAlinden, Senior Fixed Income Strategist at UBS, dives into the upcoming regulatory reforms proposed by the Trump administration for the banking sector. He highlights potential changes to capital requirements and their implications for fixed income and equity investors. McAlinden explains how clearer, less volatile capital rules could release up to $300 billion for buybacks and dividends, impacting market dynamics significantly. Tune in for insights that could shape your investment strategies!
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Regulation Is Strong But Complex
- U.S. bank regulation is much stronger post-global financial crisis and rooted in Basel recommendations and Dodd-Frank.
- Reform aims to simplify overlapping, outdated calculations while preserving safety and soundness.
Watch Four Capital Reforms
- Expect banks to hold somewhat less capital and for requirements to be less volatile year-to-year.
- Watch SLR, stress tests, G-SIB surcharge, and Basel III endgame as the four reforms to monitor.
Basel III Likely Capital Neutral
- Final Basel III endgame now looks likely to be capital neutral rather than raising requirements materially.
- Clarifying Basel III should free management to deploy excess capital once rules finalize.