Donald Trump's victory: Ten key points
Ten key points from Donald Trump's victory.
Compared to the rest of the world, the global competitiveness of the US financial services sector has never been stronger. Despite (or because of) the pains of Dodd-Frank and its related rules, the industry has made substantial improvements. Most US financial institutions have transformed their balance sheets, structure, and business models to compete in the post-crisis regulatory world. With a new administration ahead, financial institutions are now thinking strategically about what’s next.
New rules, new standards. Regulations continue to be a top priority for financial institutions. In the past year, there has been a particular focus on:
PwC's Financial Services Advisory Leader, Dan Ryan, discusses the U.S. banking system's regulatory mosaic, and how changes in the administration might have an impact.
“With the new administration, we think small institutions can expect supervisory requirements to ease up. The largest banks are likely to see fewer enforcement actions too, but the changes may not come as quickly.”
Many questions, few answers, and a lot of uncertainty. In our paper Donald Trump's victory: Ten key points, we offer the following predictions about financial regulations under the new administration:
1. Dodd-Frank will not be repealed.
2. However, some targeted Dodd-Frank rollback by Congress will occur.
3. President-elect Trump’s broadest impact on financial regulation will come from his appointments to the federal agencies.
4. Stress testing and resolution expectations will continue easing for smaller banks and stop rising for the largest ones.
5. Priority Fed rulemakings will proceed, but other rulemakings are far less likely.
6. The SEC will likely complete its derivatives rules this year.
7. Asset management rules will be hard for the SEC to complete.
8. The DOL’s fiduciary duty rule will remain intact, but compliance deadlines face delay.
9. The FSOC will likely shift its mission toward identifying opportunities for deregulation.
10. AML and sanctions regulation will stay on course.
The regulatory environment will continue to evolve in 2017 and beyond. To thrive in the middle of complexity, you’ll have to be ready to adapt.
Prepare for the DOL fiduciary duty rule. While the April 10, 2017 compliance deadline may change under the new administration, you should continue your work to meet the rule’s requirements and consider the DOL’s recently released FAQs for further guidance.
Continue stress testing and resolution planning. Both Republicans and Democrats have pressured the Fed and FDIC for years to address possible big bank failures. We predict that expectations for the larger banks will stop rising. But large firms still have to address the deficiencies and shortcomings in both capital stress testing and resolution planning that the agencies have recently identified. Meanwhile, regional banks shouldn’t take the one year delay on their 2016 resolution plan filing as an opportunity to put pencils down. The December 2017 deadline will be here soon enough.
“The DOL fiduciary duty rule is about customer protection, transparency, and eliminating conflicts of interest. While the timing of complying with the rule might change under the new administration, as of now we expect the core framework to remain intact.”
Ten key points from Donald Trump's victory.
Ten key points from Governor Tarullo’s speech on stress testing and the Fed’s NPR.
Five key points from the Fed's 2016 DFAST.
Five key points from the 2016 Comprehensive Capital Analysis and Review (CCAR).
Ten key points from Agencies’ resolution plan feedback.
Publications and thought leadership from the financial services regulatory practice.
Dan Ryan discusses the outlook for banks and their impact on the economy.
PwC’s Michael Alix and John Garvey discuss the election results and what they could mean for financial services. The next four years will bring change, but financial institutions can expect to continue improvement in governance and controls. Still unknown: how President-elect Trump will handle the Volcker Rule and other key policies. The Republican-led White House and Congress could have the industry rethinking some key assumptions.
Our teams in asset and wealth management, banking and capital markets, and insurance are helping our clients tackle the biggest issues facing the financial services industry. With professionals across tax, assurance, and advisory practices, we can help you find ways to thrive even in a period of uncertainty. Whether you're preparing for regulatory changes, putting FinTech/InsurTech to work, or rethinking your human capital strategy, we work together with you to deliver value to your business.
For more information on how PwC can help with the regulatory environment, reach out to one of our leaders below or explore our US Financial Services Regulatory practice.
US Financial Services Advisory Regulatory Leader
Tel: +1 (646) 471 5806
Global FS Risk & Regulation Leader
Tel: +1 (703) 918 1433