Citi CEO Says Banks to Benefit From Expected Trump Regulations

(Bloomberg) - Wall Street would be helped by a less-stringent version of crucial banking regulation that's expected once US President-elect Donald Trump takes office, Citigroup Inc. Chief Executive Officer Jane Fraser said.

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The banking chief expects tighter capital regulations — known as Basel III Endgame — to be significantly eased, if they're enacted at all, she said Friday in a CNBC interview. Any increase in capital requirements for US banks is likely to be lower than the roughly 9% hike previously planned, she said.

"I would expect a lighter version of the proposal," Fraser said.

Trump's election has pushed banking stocks strongly up this week, indicating broad-based confidence that his administration will bring less-onerous rules to a sector that's fought what it claims are overreaching and unnecessary regulations that threaten to make it less competitive.

Citigroup's shares rose 1.2% at 11:28 a.m. in New York. They are up more than 8% since the close of trading Tuesday, when Americans voted.

Fraser added that she's confident about the outlook for the US economy and labor market, comparing it with Europe's relative stagnation and uncertainty over whether China's economic stimulus can drive growth.

A quick, decisive result in the US presidential election has also given confidence to the market for mergers and acquisitions, she said, claiming it's "game on" for M&A, driven in particular by private equity sponsors.

"I think we can declare the sponsors will be back," she said, adding that there's a particularly positive outlook for technology, media and telecommunications as well as across North America more broadly.

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