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AmericasJanuary 2 2017

The Trump effect: what impact will the new US president have on the country's banks?

Dodd-Frank is not likely to be repealed, but the incoming US government has signalled big changes for the banking industry. Smaller players will get the most regulatory relief, but Wall Street will win in other ways. Danielle Myles reports. 
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Opportunity is knocking for US banks, and from an unlikely source. Within three weeks of Donald Trump’s surprise victory in the 2016 presidential race, he and his posse of advisors had vowed to roll back the post-crisis regulatory overhaul known as the Dodd-Frank Act, chosen a former-investment banker as treasury secretary, and promised tax cuts and a $1000bn fiscal stimulus that will pave the way for interest rate hikes.

The ultimate goal is to lift economic growth above 3%, but these measures also promise a reprieve for the country’s most heavily scrutinised industry. Whether the incoming administration delivers on its ambitious plans is an open question, particularly given the president-elect’s penchant for unpredictability, but the markets are certainly allowing him the benefit of the doubt.

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