Capital Markets Aren't Banking on Promise of Deregulation

LOS ANGELES—The Trump administration is promising to end Dodd Frank and deregulate the banking industry, but those changes might not be coming soon. In the meantime, it is business as usual in the capital markets, according to Shlomi Ronen of Dekel Capital. President Trump's recent address to Congress was evidence that these changes would come slowly and would need the involvement of the legislative branch of government.

“I think the new administration is dealing with the reality of having to get something done in Washington,” Ronen tells GlobeSt.com. “We saw it in his address to Congress that you have to be able to find some sort of middle ground and involve the legislative branch of government. That is the beauty of our legal system. So, to really effectuate changes in Dodd Frank, they are going to have to get Congress on board, and I think there is a process that they are going to have to go though. That will take time.”

If the administration is able to push through reforms to Dodd Frank, changes will likely come slowly. Ronen said that they may also be a compromised version of the proposed changes. “The scope of the changes that they end up being able to implement may not be as significant as they are initially proposing,” he says. “It is really still a wait-and-see attitude in terms of how quickly they will roll back the regulatory changes that are in place.”

For now, the capital markets are following the regulatory environment without anticipation of changes. “No one is changing their strategy based on the anticipation of reduced regulations,” explains Ronen. “Everyone is continuing to do business as usual and by the rules as they stand today. No one is anticipating wholesale changes in the market or sitting on the sidelines until those happen. If it happens it is great, and if it doesn't it is business as usual for everyone. This is a healthy market, and we continue to see economic growth. Until something happens that slows down economic growth, I think we still have some runway.”

LOS ANGELES—The Trump administration is promising to end Dodd Frank and deregulate the banking industry, but those changes might not be coming soon. In the meantime, it is business as usual in the capital markets, according to Shlomi Ronen of Dekel Capital. President Trump's recent address to Congress was evidence that these changes would come slowly and would need the involvement of the legislative branch of government.

“I think the new administration is dealing with the reality of having to get something done in Washington,” Ronen tells GlobeSt.com. “We saw it in his address to Congress that you have to be able to find some sort of middle ground and involve the legislative branch of government. That is the beauty of our legal system. So, to really effectuate changes in Dodd Frank, they are going to have to get Congress on board, and I think there is a process that they are going to have to go though. That will take time.”

If the administration is able to push through reforms to Dodd Frank, changes will likely come slowly. Ronen said that they may also be a compromised version of the proposed changes. “The scope of the changes that they end up being able to implement may not be as significant as they are initially proposing,” he says. “It is really still a wait-and-see attitude in terms of how quickly they will roll back the regulatory changes that are in place.”

For now, the capital markets are following the regulatory environment without anticipation of changes. “No one is changing their strategy based on the anticipation of reduced regulations,” explains Ronen. “Everyone is continuing to do business as usual and by the rules as they stand today. No one is anticipating wholesale changes in the market or sitting on the sidelines until those happen. If it happens it is great, and if it doesn't it is business as usual for everyone. This is a healthy market, and we continue to see economic growth. Until something happens that slows down economic growth, I think we still have some runway.”