‘Basel Is on Life Support’ in Trump Era
By John Heltman and Ian McKendry
Basel’s days may be numbered. That’s the conclusion of Wall Street critics, industry observers and bankers alike, who see political support for the international capital accord at an all-time low. … But others warn that abandoning Basel could have grave consequences. Karen Shaw Petrou, managing partner at Federal Financial Analytics, said the accords may not be perfect and certainly have aspects to them – particularly the final round of rules – that may not be strictly in the U.S. near-term interests. But the accords are there to prevent global financial catastrophes, not boost short-term growth, and however flawed they may be, discarding them and replacing them with nothing isn’t a smart move. “It’s absolutely true that Basel has been proposing some things that at least I think are not good for the United States – we have a different financial system, too,” Petrou said. “But this really uneasy structure was designed fundamentally to prevent that lowest-common-denominator race to the bottom.”