Regulatory Pressures Weigh on Growth at Goldman Sachs and State Street
January 19 2012 - 8:20AM
Marketwired
Major Banks have reported a mixed bag of results this earnings
season. While loan growth is on the upswing, banks with a heavy
focus on trading struggled in the fourth quarter. As reported in
Bloomberg, concerns that the European debt crisis would lead to a
global economic slowdown curbed trading volume and
investment-banking deals in the year's second half. The Paragon
Report examines investing opportunities in the Money Center Banking
Industry and provides equity research on Goldman Sachs Group Inc.
(NYSE: GS) and State Street Corporation (NYSE: STT). Access to the
full company reports can be found at:
www.paragonreport.com/GS
www.paragonreport.com/STT
Mike Mayo, an analyst at CLSA Ltd., told Bloomberg News that
U.S. banks' revenue growth in 2011 was probably the slowest since
the Great Depression and is unlikely to improve this year. Acting
Comptroller of the Currency John Walsh recently warned that the
Volcker rule's restrictions on proprietary trading and hedge fund
investments could put U.S. banks at a competitive disadvantage to
their foreign counterparts.
The Volcker rule would curb banks' trading with their own funds
and would limit their investments in hedge funds -- restrictions
that would reduce their profitability.
The Paragon Report provides investors with an excellent first
step in their due diligence by providing daily trading ideas, and
consolidating the public information available on them. For more
investment research on the Money Center Banking industry register
with us free at www.paragonreport.com and get exclusive access to
our numerous stock reports and industry newsletters.
In other regulatory news, the FDIC recently approved a notice of
proposed rulemaking (NPR) that would require certain large insured
depository institutions to conduct annual capital-adequacy stress
tests.
Under the proposal, the FDIC by mid-November each year would
provide banks with three economic scenarios for the future. By Jan.
5, banks would send the FDIC a report on how the institution would
cope with the scenarios. The reports would be published 90 days
after that.
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