Sunday, February 5, 2017

US BANKS WILL BE AT RISK DUE TO NEW TRADE PACTS


Well their used to be a debate among the global financial players about which place will be the hub for the global financial market, will it be London or Newyork.  In today’s time we all know the truth. Well what I am concerned in my research is that Trumppolinomics will create huge problem for the US based banks to operate in those countries where Trump will enter into trade and investment fight. Global Banks are at high risk levels now. Their profits are declining, they have complex products to deal with , followed with many legal cases due to violation of norms and practices and now the new feather in the cap arising from US based trade practices.

What I find is that local banks should be strengthened and their share prices will go up significantly as flight of business and trade will accelerate due to the US economic trade negotiations. We are in a complex world filled with complex business structures. Central banks across the globe might be getting ready for increasing the rate of interest to get inflation back in their economies. But silently as new trade agreements are being placed form Trump, it will create an automated inflation among many countries. Commodity prices will go up significantly as cross border taxation norms are revised. We should not forget that US is a strong market for the commodity based exchange. Hence rattle in Dowjones will lead to open up opportunities in Commodity exchanges.

Asian Banks operating in foreign countries restricted to Europe only are going to get benefit. They will have more opportunities of growing business and entering into new trade opportunities. Banking industry will also face the collapse of bonds and there will be no takers at the local levels of the foreign countries where US banks are operating. The death spiral will be too strong and the depth of the carnage will be strong too.   Complex debt products and equity stakes through Private Equity and M&A deals will come to a halt and this will affect the global economic growth in the near term.


 Governments of different economies with whom US is preparing war need to focus on their local banks and strengthen their business and should promote them. Capitalism is coming to an end from the US economic policies and hence local governments should focus on their own business.  The delay and affect of  Trumpolinomics will create should be annihilated from now provided the economies gets into serious business of strengthen the business of their own locals.

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