As Donald Trump takes office, many in the financial sector are waiting to see if the promised and hoped-for changes in the financial sector happen.
There is talk of everything from the repeal of Dodd-Frank and the Volcker rule, to increased deregulation and decreased power of the Consumer Financial Protection Bureau.
Even if Dodd-Frank is not repealed and there isn’t sweeping deregulation, simply the prospect of no new regulations has financial leaders optimistic.
“There is a real opportunity for an incoming administration to start with a fresh slate, without all the scars of the financial crisis, to take a holistic look at post-crisis regulation and decide on the relative costs and benefits,” Greg Baer, a former JPMorgan executive now running a lobbying firm, told the Financial Times.
For commercial real estate, this is potential for growth. CBRE has revised its forecast for GDP growth in 2017 from 2.5 percent to 3.5 percent.
That potential means opportunity for lenders, including direct private lenders.
“Investors and developers are ready to move forward,” said Kennedy Funding president and CEO Kevin Wolfer. “Direct private lending, with closings in days rather than months, means developers have capital to get projects started, which spurs economic growth.”
Not even the prospect of increased interest rates is tempering the optimism very much. The recent economic stability, as opposed to the insecurity of the Great Recession, has many in the industry believing they can handle an increase because, in a historical context, rates are still pretty low.
Sourcing:
https://www.bisnow.com/washington-dc/news/economy/for-willy-walker-4-gdp-growth-under-trump-is-his-biggest-fear-69576
https://commercialobserver.com/2017/01/what-cre-finance-will-look-like-in-2017/
https://www.ft.com/content/c7a5fde4-d722-11e6-944b-e7eb37a6aa8e
https://www.bisnow.com/national/news/capital-markets/debt-capital-foreign-investment-to-remain-widely-available-for-cre-in-2017-69703
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