Trump Could Finally End One of Wall Street's Oldest Financial Fights

The Basel III Endgame, a regulatory battle that has constrained Wall Street for years, may finally be coming to an end with Trump's victory. The banking industry is optimistic about a more favorable regulatory environment under the new administration, potentially leading to a review or relaxation of the proposed capital requirements. This could significantly impact banks' profitability and risk profiles, benefiting companies like Morgan Stanley, which the author favors for their steady performance.



Trump's win has sparked optimism on Wall Street, with bank stocks surging 10% as the industry anticipates a more favorable regulatory environment. The Basel III Endgame, an effort to impose stricter capital requirements on banks, has been a contentious issue for years. Industry sources suggest that the Trump administration may reconsider this regulation, potentially loosening capital requirements. This could significantly impact banks' profitability and risk profiles, benefiting companies like Morgan Stanley, which the author favors for their steady performance.



However, the outcome remains uncertain, as it depends on lobbying efforts and the new administration's priorities. Trump's trade policies, including tariffs, could introduce uncertainty and inflation, impacting Wall Street's overall performance. The global banking community will be watching closely to see how Trump's administration navigates this delicate balance between economic growth and financial stability.

In conclusion, Trump's victory signals a potential shift in Wall Street's regulatory landscape, with key appointments expected to influence the Basel III Endgame resolution. The banking industry anticipates a more favorable regulatory environment, which could lead to a review or relaxation of the proposed capital requirements. However, the outcome remains uncertain, and the impact on Wall Street will depend on the new administration's priorities and trade policies.