Saturday, April 1, 2017

Crisis Watch Update - The New Gridlock?

Really nothing new to report here. As we have said, if any kind of major crisis like we watch for here does arise, it will likely revolve around the ongoing battle between the Trump Administration and the existing power structure it wants to disrupt. 

In some ways we may have a new form of gridlock. Instead of Republican vs. Democrat we now appear to have the would be Disruptors vs. the Existing Power Structure (which draws from both political parties). So far, neither side appears to have gained much ground. Hence, what I will call "the new gridlock" for now. 

Trump appears to be someone who can pivot on a dime and change teams (talked about working with Democrats as soon as the GOP bill failed) when it suits his purposes to avoid gridlock if he can. But the entrenched factions that exist in the present system may be able to frustrate him as happened with the recent GOP health care bill. More on this thought later. It may provide us a clue as to how Trump might deal with a major financial crisis if faced with one during his term.

Added note: I got the BIS email alert below advising me of new BIS guidelines for banks exposed to risk from so called "Shadow Banking."

BIS Alert - Press Releases 
15 March 2017
Press release about the Basel Committee publishing proposed guidelines for the identification and management of step-in risk, 15 March 2017.

"The proposed framework will help to mitigate potential problems at shadow banks from spilling over to banks. This work is part of the G20's initiative to strengthen the oversight and regulation of the shadow banking system with the aim of mitigating systemic risks, in particular, those arising from banks' involvement with shadow banking entities."

and also another email alert on rules for "globally systemically important banks" here:

BIS Alert - Press Releases 
28 March 2017
Press release about the Basel Committee issuing a progress report on banks' implementation of the principles for effective risk data aggregation and reporting (28 March 2017).

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