FT News Briefing Trump administration to roll back banking rules
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May 19, 2025 The UK is hosting its first post-Brexit summit with the EU, aiming to reset relations. Meanwhile, the US plans to significantly cut banking regulations, raising concerns about stability in the banking sector. Diplomatic efforts are underway to sway US President Trump before he speaks with Putin. China's electrification is gaining momentum, with electric vehicles set to dominate the market, driven by national security interests. The podcast also delves into China's pivotal role in clean technology amid rising global trade tensions.
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Bank Capital Rules Explained
- The Supplementary Leverage Ratio requires big US banks to hold 5% of their assets as capital to prevent crises.
- It was introduced in 2014 after the 2008 financial crisis to increase banking sector resilience.
Deregulation Plans for Banks
- The Trump administration plans to reduce capital buffers for the biggest banks to align with international standards.
- Alternatively, it may exclude low-risk assets like treasuries from capital requirements to ease regulations.
Goal of Reducing Capital Requirements
- Easing capital requirements aims to encourage banks to trade and support the US Treasury market more actively.
- Increased bank participation is expected to improve liquidity and stability in this critical market.