Stock markets have been especially kind to banks since the Trump election, and last week’s announcement of an executive order to reduce financial regulation added a further boost. But regulatory relief will be slow in coming and may not be as much as markets seem to expect. And for European banks, the net effect is likely to be that they fall even further behind their US counterparts.

The Trump approach to financial regulatory reform is as chaotic as everything else. In the past year, he has said he wants to dismantle Dodd-Frank, to break up the banks, and to restore Glass-Steagall. He has also said he supported the Financial Choice Act, for which Congressional hearings will soon begin. But, on February 3 he took a different (or an additional) approach by issuing an executive order to establish “core principles” of financial regulation, which include remaining tough on the banks, but eliminating ineffective regulation and that not vetted by rigorous cost-benefit analysis.