Aug 2, 2017 - Economy

Bank stocks are flying high

Bank stocks reached highs not seen in close to 10 years on Tuesday, as investors piled into a financial services sector set to benefit from continued deregulation and rising corporate profits.

Data: S&P Dow Jones Indices; Chart: Lazaro Gamio / Axios

The latest deregulatory push coming from Washington is an attempt to loosen Volcker Rule regulations, which are meant to bar banks from using taxpayer-insured funds to make speculative bets. In practice, it has been difficult to distinguish between that behavior and client-focused activities, like acting as a middleman between buyers and sellers of stock, and banks say complying with rule is expensive.

Why it matters: The financial services sector is an indicator for investor sentiment towards the economy more broadly, but it's also evidence of the bank-friendly climate in Washington, a trend voters may want to put a stop to in 2018 and 2020.

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