Senior bankers indicated on Tuesday that globalization may undergo a significant reset as U.S. President-elect Donald Trump signals plans for trade tariffs and raises concerns about regulatory disparities between Wall Street banks and their international counterparts.
Last month, Trump announced plans to impose a 25% tariff on all products from Mexico and Canada, along with an additional 10% tariff on goods from China, effective on the first day of his second term.
Tanuj Kapilashrami, Chief Strategy and Talent Officer at Standard Chartered, noted at the FT Global Banking Summit in London that while such tariffs could disrupt supply chains, they might also create new opportunities for banks in Asia and the Middle East.
In a separate statement, Piero Cipollone, a board member of the European Central Bank, warned that U.S. import duties could dampen economic growth and inflation across the 20 eurozone countries.
Some analysts predict a wave of financial deregulation on Wall Street during Trump’s second term, suggesting that the implementation of ‘Basel Endgame’ rules, intended to fortify the global banking system, may not progress as quickly in the U.S. as it will in Europe.
C.S. Venkatakrishnan, CEO of Barclays, expressed optimism that regulatory changes would align more closely between the U.S. and Europe, which would help European banks remain competitive. “It’s realistic… The world has invested a lot in this,” he said. “We often focus on individual personalities, but the U.S. is a nation with strong institutions that understands its crucial role in the global arena.”
European bank executives are increasingly concerned that U.S. banks may see even greater returns if Trump’s policies favor domestic markets. Recent research from Alvarez & Marsal indicates that North American banks are currently outperforming their European counterparts in revenue generation, with net interest margins of 1.8% compared to just 1.2%.
