Deregulation hands top US and UK banks $1.3tn opening

{"text":[[{"start":8.55,"text":"Regulatory loosening has allowed top American and British banks to expand their balance sheets by $1.3tn in the past two quarters, new research shows, widening a gap with their more constrained EU and Swiss rivals. "}],[{"start":21.85,"text":"Deregulation by Washington and London will enable big US and UK banks to grow their assets by a total of $2.9tn while greater capital requirements for seven of the EU’s biggest banks will squeeze their balance sheet capacity by €1.3tn, according to research by consultancy Alvarez & Marsal."}],[{"start":41.85,"text":"US regulators have ushered in a wave of bank deregulation since Donald Trump became president last year, watering down many of the rules imposed after the 2008 financial crash that forced banks to raise bigger loss-absorbing buffers. "}],[{"start":56.2,"text":"Reforms will free up capacity for eight of the biggest Wall Street lenders — JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, Wells Fargo, Morgan Stanley, BNY and State Street — to expand their balance sheets by $2.5tn, or 15 per cent, roughly equivalent to adding another Citigroup."}],[{"start":null,"text":"

"}],[{"start":78.15,"text":"In the UK, three big British banks are set to benefit from a $12bn reduction in their capital requirements, the research found, enabling them to grow their assets by $400bn. "}],[{"start":89.15,"text":"HSBC, Barclays and Standard Chartered, the three most international UK lenders, have already responded by growing their assets $200bn in the past two quarters."}],[{"start":100.80000000000001,"text":"“Global regulators are taking different paths in bank capital reform,” said Fernando de la Mora, co-head of financial services at Alvarez & Marsal. “The US is going fast and furious. The UK is following, maybe at a slower pace than anticipated, but we will see more.”"}],[{"start":116.60000000000001,"text":"Seven of the top EU lenders — BNP Paribas, Deutsche Bank, Santander, Crédit Agricole, BPCE, Société Générale and ING — are set to have their combined capital requirements raised by €39bn in a sign of how the post-financial crisis regulatory consensus is fracturing. "}],[{"start":138.3,"text":"EU banks still hope to persuade policymakers to dilute capital requirements and executives are pressing the European Commission to provide relief."}],[{"start":null,"text":""}],[{"start":147.60000000000002,"text":"Switzerland, however, is tightening its banking rules more aggressively. Swiss authorities are locked in dispute with the country’s biggest lender UBS over a proposal to raise its capital requirements by $20bn, which would reduce its asset capacity by $400bn."}],[{"start":165.15000000000003,"text":"US banks have continued to gain market share in wholesale banking since the start of last year, growing their fixed income and equity trading revenues 5 per cent faster than their European rivals in that period, Alvarez & Marsal said."}],[{"start":179.20000000000005,"text":"Goldman Sachs has been the biggest beneficiary, with a 3 percentage point drop in its capital needs, the research found. In the first quarter, Goldman seized on this to slash its core equity tier one capital from 15.1 per cent to 13.3 per cent. Its total assets rose 8 per cent to $1.95tn."}],[{"start":null,"text":""}],[{"start":201.15000000000003,"text":"There are further signs US deregulation is achieving one of its stated goals by boosting banks’ ability to trade more government debt. Net Treasury inventories held by the big US banks rose to about $550bn this year, up from less than $400bn last year, according to FT calculations."}],[{"start":219.20000000000005,"text":"“Almost all the money the US banks made in profits, they distributed to their shareholders,” de la Mora said. “But they were still able to deploy more capital to their businesses by expanding their balance sheets, by doing more lending and increasing capital markets activities.” "}],[{"start":245.25000000000006,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1779778159_9221.mp3"}