At this writing it’s only been three weeks since the November 8 “tectonic shift” – as veteran financier Henry Kaufman dubbed the US election results. And while this Brexit-like outcome has injected a high degree of uncertainty into capital markets globally, there are potential positives emerging.

In particular, we are encouraged by possible tailwinds for private credit and the middle market. Many of the dynamics we have seen over the years we expect will remain in place as the environment for middle market lending remains favorable. Keeping in mind that prognostication is a long way from policy, we’ve considered several issues where these sectors might benefit in the context of a Trump administration:

Bank Regulation. Recent commentary on likely approaches the President-elect may take on bank regulation suggests a reduction in “red tape” for banks. If the campaign’s populist approach is any indicator that suggests attention will be primarily focused on areas in which commercial and community banks are already active. These would include mortgage lending, credit cards, student loans and auto finance; loans with a direct link to Trump’s constituency – the lower and middle income consumer.

Capital Requirements. It seems unlikely that the incoming administration will focus on (or have domestic or overseas support for) reducing bank capital requirements. Basel III is an international bank solvency standard and has a far greater impact on the middle market lending area. The gradual increase in these requirements has pushed banks (particularly the largest ones) further into investment banking and other fee-based activities and away from middle market lending – an arena that is today dominated by non-bank institutional investors. The consensus is that these capital requirements have strengthened US banks and made it less likely that they would ever be imperiled by a global financial crisis.