Regulation: Gauging the 2016 Presidential Candidates’ Views скачать в хорошем качестве

Regulation: Gauging the 2016 Presidential Candidates’ Views

With the U.S. presidential election days away, we are breaking down the views that each candidate has on regulation and, ultimately, the impact their presidencies might have on credit quality. First let’s establish the linkage between regulation and credit quality. Most notably, from a credit perspective, how does regulation impact the Systemic Risk within the United States? We define Systemic Risk as the risk of collapse of an entire financial system or entire market. Since the Great Recession in 2008, regulatory legislation such as the Dodd-Frank Act has lowered the Systemic Risk in the United States. A good example of this effect is the Volcker Rule, which limits banks from risky derivatives-based investments using their own funds. Let’s caution that there are many inter-linkages with regulation. For example, while, in some cases, Systemic Risk might be lower, which should seemingly further protect our economy, those regulations might actually have a drag effect both on the ability of banks to lend and also on their profitability. Let’s take a look at the candidate’s views: Trump Campaign: According to published reports , the Trump campaign proposes the following: • Putting a freeze on any new federal regulation proposals. • Requiring regulators to rank all regulations and cut the least important ones. • Propose that “Dodd-Frank has to be eliminated or greatly changed.” Clinton Campaign According to published reports , the Clinton campaign proposes to do the following: • Further discourage risky investment and lending behavior for the largest banks. • Incentivize banks to shrink and simplify. • Empower regulators to break up financial institutions that are viewed as too big and too risky. If you would like information, please contact us at risk_marketing@spglobal.com.