An Interview with Bill Coen (former Secretary General, Basel Committee on Banking Supervision) and Doug Elliott (Partner, Oliver Wyman)
In a recent interview, we sat down with Bill Coen, former Secretary General of the Basel Committee on Banking Supervision (BCBS) and Doug Elliott, Partner at Oliver Wyman, to explore the future of financial regulation under a hypothetical Trump 2.0 administration. Moderated by James Bowpitt, the conversation ranged from deregulation to the Basel III Endgame and the evolving landscape of crypto and AI regulation.
James Bowpitt: Let’s start with the basics. What do you think will be the immediate focus for financial regulation if Trump assumes office again?
Doug Elliott (Oliver Wyman):
In my view, we’ll see a much stronger push for deregulation compared to Trump’s first term. This time, Trump will likely prioritise cementing his legacy, and deregulation has always been a consistent priority for him. Likely areas of focus include reducing capital requirements, revisiting supervisory frameworks, and easing prudential standards like the enhanced supplementary leverage ratio.
However, it’s worth noting that legislative hurdles will limit the scope of deregulation. The Democrats control a thin minority in the Senate and are unlikely to support substantial rollbacks of Dodd-Frank, so much of the change will happen through regulatory adjustments rather than new laws.
James Bowpitt: Bill, do you agree with Doug’s assessment?
Bill Coen (Former Secretary General, BCBS):
Absolutely. I’d also add that personnel choices will play a critical role in shaping this agenda. Trump’s expected appointments, such as Travis Hill at the FDIC and potentially Mickey Bowman at the Fed, align with his deregulatory vision. Personnel is policy, as they say. I wouldn’t be surprised if Trump leans heavily on acting appointments initially to accelerate these changes and bypass the delays of Senate confirmation.
James Bowpitt: The Basel III Endgame is a major regulatory milestone. How do you see this playing out under a Trump administration?
Bill Coen (Former Secretary General, BCBS):
I’m optimistic Basel III will get done. Most of the design and structure of Basel III have been heavily influenced by industry input, so the focus now is on calibration. Some banks with significant trading book exposures might feel a greater impact, but others will see minimal changes. I believe the framework will eventually be finalised, though likely with tweaks to the proposed capital increases.
Doug Elliott (Oliver Wyman):
I agree with Bill’s perspective. I’d estimate about a two-thirds chance that Basel III will be finalised under Trump. However, the framework will need to be capital-neutral or slightly favourable to U.S. banks to gain broad support. Implementation might not begin until 2028, given the lengthy process of regulatory drafting, public consultation, and industry lobbying. Encouragingly, I’ve seen signs that banks, especially those with more traditional balance sheets, are increasingly receptive to Basel III’s calibrated approach.
James Bowpitt: Supervision often comes up as distinct from regulation. How might this evolve under Trump?
Bill Coen (Former Secretary General, BCBS):
Supervision is a more complex area to shift than regulation. In my experience, supervisors will remain cautious, especially after the high-profile bank failures we saw last year. Silicon Valley Bank’s collapse is still fresh in everyone’s minds. No one in a supervisory role wants to be blamed for missing warning signs or for being seen as too lenient.
That said, I think we’ll see subtle changes – fewer prescriptive interventions and more room for banks to drive their own risk management decisions. But regulators will tread carefully to ensure they’re not caught off guard.
Doug Elliott (Oliver Wyman):
I’d echo that. I frequently hear from banks that supervisory culture didn’t shift as much as expected during Trump’s first term. There’s a natural conservatism among regulators, and even if the tone from the top is deregulatory, the supervisors on the ground will be hesitant to relax too much. The reality is, the incentives for supervisors lean heavily towards conservatism – being too cautious rarely leads to criticism, but being too lenient can have serious consequences.
James Bowpitt: Are there other areas where we might see regulatory developments under Trump?
Bill Coen (Former Secretary General, BCBS):
Yes, I think crypto and artificial intelligence (AI) will be key focus areas. The crypto industry has been vocal about the need for regulatory clarity, and I expect we’ll see frameworks introduced that strike a balance between fostering innovation and ensuring consumer protection. AI, too, will need more structured oversight, particularly as its applications in finance expand.
Doug Elliott (Oliver Wyman):
Agreed. On crypto, there’s bipartisan support for establishing clearer rules. AI governance might take longer to materialise, but it’s another area where regulation will inevitably evolve. Both sectors are pivotal to the future of finance, and the administration will need to address them sooner rather than later.
James Bowpitt: What about the U.S. role in international regulatory bodies like the Basel Committee?
Bill Coen (Former Secretary General, BCBS):
I don’t foresee the U.S. withdrawing from bodies like the Basel Committee or the Financial Stability Board. The U.S. benefits from strong global standards, especially as its banks operate extensively overseas. What I do expect is more assertive negotiation to ensure international agreements align with U.S. interests.
Doug Elliott (Oliver Wyman):
I agree. Initially, there was speculation that Trump might take a more isolationist approach, but I think the U.S. will stay engaged. However, we could see the U.S. act as a brake on international initiatives that conflict with domestic priorities, slowing but not abandoning global coordination.
James Bowpitt: Any final thoughts?
Bill Coen (Former Secretary General, BCBS):
A Trump second term will bring a focus on recalibrating financial regulation, but I expect a measured approach – especially in areas like Basel III and crypto. There will be some deregulatory moves, but the inherent resilience of the U.S. financial system will provide stability.
Doug Elliott (Oliver Wyman):
I agree. The focus will be on recalibrating standards to spur economic growth while maintaining financial stability. Trump’s deregulatory approach will shape the agenda, but supervisors and regulatory processes will likely temper the pace of change.