The deregulation winds blowing through Washington could add $27 billion of gross profit at the six largest US banks, lifting their annual pre-tax income by about 20%. JPMorgan Chase and Co. and Morgan Stanley would benefit most from changes to post-crisis banking rules proposed by Donald Trump’s administration, with pre-tax profit jumping 22%, according to Bloomberg estimates based on discussions with analysts and the banks’ own disclosures. Goldman Sachs Group Inc. would have the smallest percentage increase, about 16%. Bloomberg

Record reserves turn costly for RBI

As India’s foreign exchange reserves march towards the unprecedented $400 billion mark, its central bank faces a costly conundrum. To keep the rupee stable and exports competitive, it is having to mop up inflows that’s adding cash to the local banking system. Problem is, banks are flush with money following Prime Minister Narendra Modi’s demonetisation programme last year, leaving them already struggling to pay interest on the deposits in an environment where loans aren’t picking up. The resulting need to absorb both dollar- and rupee-liquidity is stretching the Reserve Bank of India’s (RBI’s) range of tools and complicating policy. Costs to mop up these inflows have eroded RBI’s earnings, halving its annual dividend to the government. Bloomberg

China’s robot revolution to affect global economy

China is installing more robots than any other nation, and that may affect every other nation. Shipments jumped 27% to about 90,000 units last year, a single-country record and almost a third of the global total, and will nearly double to 160,000 in 2019, estimates the International Federation of Robotics. The blazing pace hasn’t dented Chinese wages—yet—but it might influence the global economy, according to a report this week by Bloomberg Intelligence. Automation may drive productivity gains and export competitiveness, but the rising use of robots also threatens to exacerbate domestic income inequality, undermining consumption. And that could spill out beyond the country’s borders, say economists. “By turbocharging supply and depressing demand, automation risks exacerbating China’s reliance on export-driven growth—threatening hopes for a more balanced domestic and global economy," wrote Bloomberg Intelligence economists Tom Orlik and Fielding Chen. Bloomberg

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