07 March 2017
Seoul
Reporter: Drew Nicol

Future of Basel IV in jeopardy from Trump


The future of Basel IV has been thrown into question in the wake of a new wave of anti-regulation sentiment emanating from the US, Pan Asian Securities Lending Association/Risk Management Association conference delegates heard earlier today.

A panel of regulatory experts at the conference in Seoul concluded that US President Donald Trump’s attempts to reopen the debate on the need for post-financial crisis banking regulation has put a significant roadblock in the way of future initiatives.

“There is some nervousness in the Basel Committee on Banking Supervision because of the uncertainty,” one panellist explained.

Another panellist agreed and added that he is confident a further iteration of the Basel regulatory framework will be formed, but that it will likely be “so watered down that people will get some flexibility”.

“It’s better to have something agreed than nothing,” the panellist said.

Basel IV will likely focus on aligning the many requirements of existing regulations around the world, including Basel III, which will finish being rolled out in 2018.

Trump laid the groundwork for an extensive review of US financial regulation in the opening weeks of his administration by signing an executive order giving the Treasury broad powers to scrap rules that do not comply with his administration’s loosely defined ‘core principles’.

Another panellist argued against ending preparations for upcoming regulatory deadlines on the assumption that they may be postponed, given the lack of appetite for significant rollbacks globally.

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