I don't think that tariffs are going to be very important, except as a tool for Trump to keep importing industries MAGA-friendly. (I notice that Wal-Mart has already dropped its DEI initiatives.) Otherwise, performative bullshit.
I'm much more concerned about taxes. There will be some performative attacks on government spending, but it won't change much, unless you're a poor person who relies on public benefits. Taxes will likely go through the floor, with likely effect on exchange rates and inflation. Tax cuts are the one issue that elected Republicans are unified on. Can Bessent take them on, with no support from Trump? Or--like most rich guys--does he have a blind spot on taxes?
Not only RWA are a major distraction and a way for bankers to avoid supervision, but liquidity requirements only fuel bankers' argument right, on the costs of regulation. Let's focus on equity and stop pretending our supervisors are all-powerful. We need less reliance on supervision and more on clear simple capital rules. As Admati and Hellwig keep pointing out, banks' rebuttal on the costs of bank capital is a joke, but they do win the argument when we talk about liquidity controls, which then is not only a distraction but turns into a compromise to keep capital requirements low. No more distractions, simple and higher capital requirements now.
I don't think that tariffs are going to be very important, except as a tool for Trump to keep importing industries MAGA-friendly. (I notice that Wal-Mart has already dropped its DEI initiatives.) Otherwise, performative bullshit.
I'm much more concerned about taxes. There will be some performative attacks on government spending, but it won't change much, unless you're a poor person who relies on public benefits. Taxes will likely go through the floor, with likely effect on exchange rates and inflation. Tax cuts are the one issue that elected Republicans are unified on. Can Bessent take them on, with no support from Trump? Or--like most rich guys--does he have a blind spot on taxes?
Not only RWA are a major distraction and a way for bankers to avoid supervision, but liquidity requirements only fuel bankers' argument right, on the costs of regulation. Let's focus on equity and stop pretending our supervisors are all-powerful. We need less reliance on supervision and more on clear simple capital rules. As Admati and Hellwig keep pointing out, banks' rebuttal on the costs of bank capital is a joke, but they do win the argument when we talk about liquidity controls, which then is not only a distraction but turns into a compromise to keep capital requirements low. No more distractions, simple and higher capital requirements now.