Much of Europe is in mourning over Donald Trump's historic US election victory on Tuesday night. But one of the effects may be that the argument for radical reform of the EU Securitization Regulations (EUSR) just grew even stronger.
Think back to why EUSR reform is even on the agenda. It's not because French pesident Emmanuel Macron and ex-ECB boss and former Italian PM Mario Draghi have a soft spot for turning real assets into liquid securities. Their ideas stem from having lived through Trump's first spell in the White House, and to a lesser extent Brexit, back in 2016.
To the likes of Macron and Draghi, Trump's first administration highlighted, in the starkest of terms, how Europe can no longer rely on the US. Instead, Europe must be self-sufficient and competitive in a global economy.
Naturally, that includes the financial markets. And a big, gaping hole holding back European competitiveness was (and remains) the underuse of securitization.
Revitalising European securitization should be an easy win that helps banks lend more and ultimately, helps grow the real economy in Europe.
The European Commission's consultation on the EUSR is underway and where the pieces will fall remains anyone's guess. But what is clear is that many regulators do not feel compelled to jump on any deregulation bandwagon. "This is going to be a battle," as one source put it.
However, with Trump's second term imminent, the original arguments for building a fit-for-purpose financial ecosystem are thrust to the fore of politician's minds once more.
With the threat of trade wars (and perhaps worse), the impetus for a radical overhaul of EUSR just got a whole lot stronger.