The worldâ€™s biggest banks are poised to warn investors that President Donald Trump has the potential to roil global markets and impact their firms by redrawing regulations and limiting the free movement of employees, according to people familiar with the matter.
US and UK banks are considering adding to their risk disclosures or beefing up particular sections in their annual reports due later this month, according to people familiar with the drafting of the documents. Theyâ€™d likely cite the incoming new administration as a potential source of heightened uncertainty, but stop short of mention Trump by name, they said.
Although banks stand to benefit from higher interest rates and Trumpâ€™s pledge to relax rules, heightened volatility could affect trading and a slowdown in global commerce may curtail dealmaking as the president turns his attention to trade policies with China and Mexico. Bank stocks have been on a bull run in recent weeks but some money managers say investors have ignored emerging political risks.
Warnings that the new US administration may be disruptive â€œwould most likely have to be included, given the potential ramifications,â€ said Rob Smith, a partner in risk consulting at KPMG in London. â€œI would be very surprised if a particular institution called out Trump. Rather, they will explain the impacts in broader terms about US regulatory reassessments. He presents a risk, but there are also opportunities.â€