Receiving Wide Coverage ...
Winner and losers: Small and medium-size banks are likely to be the biggest winners in a Donald Trump administration. Big banks? Not so much. "One thing investors can likely be confident in is that substantial deregulation is coming for smaller banks," the Wall Street Journal said. There is already a bipartisan consensus that smaller banks are overly burdened by Dodd-Frank regulations, while there are several proposals that would raise the threshold for annual stress-testing by the Federal Reserve to $250 billion of assets from $50 billion.
But "risks loom" for the biggest banks. The Republican Party platform called for reinstating the Glass-Steagall Act's separation of investment and commercial banking.
Meanwhile, the U.S. investment industry may be in for a similar "regulatory bloodbath," the Financial Times reports. "Investors said they expected the billionaire property tycoon to take an axe to investment regulation when he takes office in January. The move is expected to boost profits at asset managers."
But another view in the FT is a lot more circumspect. "Anyone who expected bankers to be elated at the prospect of a Republican presidency should think again," says the paper's Lex commentary. "While calling for easier regulations in general, Donald Trump's particular policies are less clear. His criticism of cross-border trade flows and of the Federal Reserve's easy money policy do not point to a better environment for banks. Yet in other ways a Trump presidency may just continue banking's current path."
The Wall Street Journal looks at the people on Donald Trump's economic team, some of whom may get top posts in his administration. Steven Mnuchin, Trump's national campaign finance chairman in May, is said to be his choice for Treasury secretary, which would make him the third former Goldman Sachs banker to hold the post in the past 20 years. Trump has also gotten advice from proponents of lower taxes and less regulation, such as Stephen Moore of the Heritage Foundation and David Malpass, former Bear Stearns chief economist.
The team also include critics of U.S. trade policy, like Peter Navarro, a University of California economics professor, and Dan DiMicco, former CEO of steelmaker Nucor Corp. Other prominent advisers are Wilbur Ross, the private-equity investor; John Paulson, the hedge-fund billionaire; and Stephen Feinberg, co-founder of Cerberus Capital Management.
A Trump presidency could have a major impact on the Fed, both on policy matters and the players involved. The president-elect is no fan of the Fed or its chair, Janet Yellen. "While the Fed has managed to defend itself against a growing chorus of criticism in recent years, Mr. Trump's victory on Tuesday means it will no longer have the help of a friendly White House," the Wall Street Journal said. "That could usher in an unprecedented level of political pressure, and pave the way for potential changes to the Fed's structure and governance."
Trump's victory could even prompt the Fed to raise interest rates faster than it planned. "The president-elect has promised to stimulate faster economic growth with measures that include a large tax cut and as much as $1 trillion in spending on infrastructure," the New York Times notes. "He has also promised new barriers to imports, which could drive up inflation."
Partners: Goldman Sachs promoted 84 people to the coveted role of partner. With 19 women, or 23% of those promoted, this class has the highest proportion of women in Goldman's history. Goldman also promoted five people from its legal and compliance departments, up from none two years ago, the last time it named partners. Wall Street Journal, Financial Times, New York Times
Quotable ...
"With the support of a Republican Congress, it could be a regulatory bloodbath." — Scott Gottlieb, chief executive of U.S. Compliance Consultants, on how a Trump presidency could benefit investment advisers.
