In this report, we address client questions in the wake of recent FedFin analyses of how the Trump Administration seeks to redefine the U.S. banking system. Although FedFin’s initial forecast was discounted in some quarters, coverage in the Wall Street Journal, last week’s Senate Banking hearing (see Client Report FHC26) and Chairman Crapo’s (R-ID) comments thereafter about its political viability demonstrate the need for careful, forward-looking attention to how large banks could be restructured and resulting competitiveness and market-structure impact. FAQs in this report address the rationale behind our political forecast, key dimensions of applicable capital requirements, how inter-affiliate transaction restrictions make a critical difference, which activities might go where, what can be done by rule alone, and other policy-and strategy-critical questions.
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