President Donald Trump’s pledge to roll back regulations on U.S. banks could face resistance from an influential constituency: bondholders.
While stockholders of firms like JPMorgan Chase (JPM) and Goldman Sachs (GS) have cheered Trump’s plans to repeal or soften rules imposed in the wake of the 2008 financial crisis, bond-rater Standard & Poor’s is warning that such a move could undermine the industry’s creditworthiness.
Measures like “stress testing,” in which regulators evaluate banks annually to determine if they’re sufficiently prepared to withstand a deep economic or market downturn, have made the firms safer, according to S&P.