Regulatory loosening has allowed top American and British banks to expand their balance sheets by $1.3tn in the past two quarters, new research shows, widening a gap with their more constrained EU and Swiss rivals.
Deregulation by Washington and London will enable big US and UK banks to grow their assets by a total of $2.9tn while greater capital requirements for seven of the EU’s biggest banks will squeeze their balance sheet capacity by €1.3tn, according to research by consultancy Alvarez & Marsal.
US regulators have ushered in a wave of bank deregulation since Donald Trump became president last year, watering down many of the rules imposed after the 2008 financial crash that forced banks to raise bigger loss-absorbing buffers.