Following the Trump Administration's order for a regulatory review on U.S. banking rules, some prominent Republicans in Congress have joined with the new administration in discussing the possibility for the United States to exit or revisit its role in global banking agreements.
In a letter to Fed Chair Janet Yellen, written by Rep. Patrick McHenry, he calls the Basel III Accords "the result of an opaque, decision-making process." Comments from prominent GOP senators like Pennsylvania's Pat Toomey and Idaho's Mike Crapo echo this.
To Basel and global banking regulation critics, the removal of regulation presumably means reduced costs and increase lending opportunities for banks. Since banks have to hold extra capital for riskier loans, reducing or removing these requirements may entice them to extend credit to more borrowers. But one unintended consequence of this argument is the potential reduction of global financial stability. Coupled with a new bent towards economic nationalism, these policy changes in the U.S. may not only decrease trade between the U.S. and other nations, but could also reduce the ability and willingness of U.S. financial institutions to lend and invest abroad.