(Bloomberg) -- Long-running efforts to raise the capital requirements of the biggest US banks will likely end under the administration of President Elect Donald Trump, said Bruce Richards, chief executive officer of Marathon Asset Management.
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Global banking rulemakers are putting together a round of rules known as Basel III Endgame, designed to ensure banks have enough capital. The US’s previously proposed implementation for those rules is now being revised and eased by regulators including the Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.
“I do believe Basel III Endgame is dead,” Richards said on Bloomberg TV.
US President Elect Donald Trump will look to ease the regulatory burden on banks, which includes their capital requirements, Richards said.
That change would “unleash” lending capacity from banks across the board. One area that will benefit will be firms like Marathon, which will get attractive financing, helping asset managers to generate higher returns from lending in private markets, Richards said.
“Having that financing available from the banks is a big boon to all of us in the private credit markets,” he said.
Investors who stick to a classic 60% equity, 40% fixed income portfolio allocation should consider putting half of their fixed income investments into private credit, he said.
--With assistance from Sonali Basak and Katie Greifeld.
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