Aug 2, 2017

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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Wall Street has its best year since 2013

Data: FactSet; Chart: Axios Visuals

Wall Street had its biggest annual gain in six years — with the S&P 500 rising 29% and the Nasdaq Composite rising 35% in 2019. The Dow lagged behind other indices, but saw its biggest yearly gain since 2017.

Why it matters: U.S. stocks rebounded from 2018's year-end meltdown to log impressive gains, despite uncertainty stemming from the trade war and a slowdown in economic growth.

Six of the biggest U.S. banks have weaknesses in their crisis plans

Illustration: Lazaro Gaimo/Axios Visuals

The Federal Reserve Board and the Federal Deposit Insurance Corporation found shortcomings in the exit strategies — or "living wills" — of six of the eight largest banks in the U.S., it said on Tuesday.

Why it matters: These living wills dictate how big banks handle bankruptcy during financial distress — or a financial crisis. Bank of America and Wells Fargo are among those currently unable to prove that their top decision-makers can confidently act on crisis-level exit strategies.

Go deeperArrowDec 18, 2019

Bank of England chief puts finishing touches on climate change legacy

Photo: Kirsty Wigglesworth/WPA Pool via Getty Images

With just a month left before he steps down as head of the Bank of England (BoE), Mark Carney is putting the finishing touches on his legacy at the British central bank.

Driving the news: The BoE laid out how it planned to test the resilience of the U.K.'s largest banks and insurers in increasingly threatening environmental scenarios. It’s a notable step for Carney who's "played a key role in highlighting financial risks from global warming," as Bloomberg notes.

Go deeperArrowDec 19, 2019