Continuing our assessment of post-election financial policy in the U.S., we turn to the prospects for new-style Glass-Steagall requirements.  Although there is some broad-brush agreement here between the Republican Presidential platform and calls for reform from Sens. Warren (D-MA) and Sanders (I-VT), we think final action separating traditional banking from capital-markets activities is unlikely in large part due to GOP disagreement on this important point.  Our forecast here is based on the relatively low priority we think the Trump Administration will give this issue, although the new Treasury Secretary will of course play a key role in this regard.  Further, Rep. Hensarling’s approach goes in a totally different direction (see Client Report REFORM119), eliminating the Volcker Rule and closing down the “Hotel California” provision in Dodd-Frank (see FSM Report SYSTEMIC29) that now bars companies such as Goldman Sachs from shedding their BHC status and again becoming large “non-bank banks.”

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