What happened? None of the banks are directly linked to the ''Trump trade'' - but as a sector, which is sensitive to the health of the economy, banks could react in anticipation of the impact on the European economy of weaker trade and higher tariffs. Additionally, a reduced focus on regulation in the US could put the focus on FRTB, the B4 impact on market risks RWAs. BNPP Exane View: The European policy response (or absence of) could have a significant impact on economic forecasts and inflation expectations. While it is too soon to quantify the GDP impact on Europe, we believe that weaker growth would impact banks as it could lead the ECB to cut rates further (c.4% EPS per 25bps rate cuts below 2% all else equal), reduce lending volumes (somewhat revenue neutral as less loans can be offset by more savings or insurance income) and trigger higher cost of risk expectations (c.2% EPS impact per 5bps higher COR). On the regulatory front, we would have expected that a possible reduced bank regulation in a Trump administration could trigger a quid pro quo reaction in Europe - but recent comments by Claudia Buch (see Les Echos yesterday) suggest that a cancellation of FRTB in Europe is by no means certain, even if the US cancels it. The decision will be a political one, not a regulatory one, but the risk exists. SG would be the main beneficiary of FRTB cancellation (capital saved would be equivalent to 7% of market cap) but the European response is a significant uncertainty. All the banks exposed to FRTB (typically the IBs) can absorb the 30-50bps impact, but for their global markets division the hike in capital requirements is significant and would need pricing response to maintain profitability. This in turns would hit market shares and could destabilise breakeven points of weaker IBs in Europe. For reference, the impact per bank in terms of bps of RWA and % of market cap are: SG (c35bps, 6%), DB (c55bps, 6%), Barclays (c30bps, 3%), and UBS (c30bps, 2%)....