Financials Up as Fed Shows Leniency With Goldman, Morgan

Banks, lenders and other financial companies ticked up after the Federal Reserve allowed two major Wall Street banks to avoid some consequences of the failure of a key part of the recent "stress test." The clemency was seen as part of a new era of more lax bank regulation, following a decade of regulatory backlash against Wall Street. To pass the stress test, Goldman Sachs and Morgan Stanley would have had to cut planned payouts by $8 billion, but Fed regulators offered a workaround that resulted in a less drastic reduction of $3 billion. Vanguard Group said it will let clients trade rivals' funds on its platform for free, as it seeks to build its customer base further and expand wealth-management offerings. Accounting firm PricewaterhouseCoopers must pay $625.3 million in damages for failing to catch a fraud scheme that helped cause the failure of Alabama's Colonial Bank during the financial crisis, a federal judge ruled. A pair of lawsuits filed as part of China Fishery Group's sprawling chapter 11 case are seeking nearly $250 million in damages from the Asian arm of HSBC Holdings as well as the return of another $22 million transferred to the bank in the years leading up to the bankruptcy.

-Rob Curran, rob.curran@dowjones.com

(END) Dow Jones Newswires

July 02, 2018 16:58 ET (20:58 GMT)

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