Trump’s Team Stays the Course for Now on Global Financial Rules

Despite President Trump's anti-globalist rhetoric, one full year into President Trump's administration, it seemed to be business as usual last year in terms of U.S. engagement with international financial regulators. However, the Wall Street Journal reports that there are hints that this approach may change moving forward.

Last year, the Commodity Futures Trading Commission, which is under a Republican chairman, continued to embrace multilateralism; and in December, international regulators announced an agreement on standardized risk measurements for global banks, the latest stage of the Basel banking accords, a sweeping overhaul of bank-capital rules that followed the financial crisis.

The process was supported by Randal Quarles, the Trump-appointed Vice Chairman for Banking Supervision at Federal Reserve. "It was quite close before I stepped into the building," Quarles said of the agreement in his first public appearance as a Fed official in November. "There is merit in ensuring that there is at least…some minimum level of comparability between the approaches internationally."

Despite the continuity shown so far, however, many still see the Trump Administration as skeptical of global rule-making bodies, as was exemplified in the series of Treasury Department reports released over the past year.

In the series of reports, the Treasury Department kept its critiques fairly broad, recommending recalibrating bank capital and liquidity standards set by the Financial Stability Board and calling on U.S. regulators to "provide clarity on how the U.S.-specific adoption of any new Basel standards will affect capital requirements and risk-weighted asset calculations for U.S. firms", among other recommendations.

David Malpass, who was confirmed in August as Treasury Undersecretary for International Affairs, said in an interview, "I'm encouraging a clear, narrower focus of activities" at the Financial Stability Board, "There was clearly a different view of multilateralism in the previous administration."

For SFIG's overview of the Treasury report, please see our Fact Sheet and Position Matrix.

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