The new US administration’s financial deregulation project has raised considerable concern about financial stability. For the time being, the details of the changes have not been spelled out, and it is unclear what level of support they will receive from Congress. Many are arguing that the leverage ratio should be (re)established as the foundation of the US prudential framework. The scope of the application of Basel 3 could be narrowed and the body of Basel rules to be applied could be limited.
The June 2016 referendum and triggering Article 50 signalled the beginning of Brexit, the UK’s exit from the European Union. Brexit promises to be a long process fraught with obstacles. There are numerous sources of potential conflict, foremost of which are the so-called Brexit bill, the amount the UK must pay the European Union as part of its “divorce settlement”, and the rights of EU citizens residing in the UK. Given the close ties between the UK and the European Union, the big challenge in the years ahead will be the negotiation of a new trade agreement. Yet with the UK determined to halt the free movement of people, a priori very few options are open.
