Big banks are preparing for significant revenue declines, with projections indicating a potential annual decrease of up to $50 billion by 2027, primarily in the corporate and investment banking sectors in the United States.

Despite expectations of deregulation under the incoming Trump administration, the forecast highlights the increasing competition from private credit and electronic market makers.

Research suggests that while banks may offset approximately $15 billion of these losses by increasing lending to illiquid private markets, this shift raises concerns among policymakers regarding the risks associated with shadow banking.

Non-bank entities, particularly those utilizing borrowed funds, could exacerbate market volatility, as noted in the latest financial stability report from the Bank of England.