Kristin Moyer, David Furlonger, Peter Redshaw and Rick DeLotto here. The US election has almost arrived. A few final thoughts on how the newly elected President and Congress will impact banks and IT:
- We believe that R&D is likely to continue to move “offshore” to countries with existing technology capabilities, interests and funding. The key issue right now for the US and other established markets is funding. The huge deficit that continues to be run and which will undoubtedly increase will make it difficult for the next President and the government to fund viable R&D. For the private sector, the issue is also cash – access to it and cost of capital. Maybe we should look to Moscow for the next set of developments?
- We believe that regardless of who is elected, the next President will be under pressure to act in a protectionist fashion. This could include everything from discouraging the offshoring of work or putting tariffs on foreign imports. In the short-term, this might help US-based IT companies. But in the long-term, protectionism is usually bad for both the IT industry and its customers because it reduces competition and innovation.
- We believe that the post-election future of the US $700 billion bailout is unclear, particularly given there are serious doubts about the efficacy of the existing plan.
- A Democrat victory may bring:
- Increased consumer protection laws, including “predatory lending”
- The possibility of direct federal mortgage lending
- A move towards a single, federal regulator – first for banks, then for all financial services institutions
- A Republican victory may bring:
- Increased bimodal distribution – a few VERY large national banks and a lot of growth at the “boutique,” credit union and community bank level
- Increased use of banks as law enforcement agencies
- Could be potentially surprising and disruptive regarding anti-corruption campaigns
You can follow updates on the election through Twitter. We hope that you have either already submitted your ballot or that you have plans to vote tomorrow. Remember, it’s your right - and, if you don’t vote you can’t complain.