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.
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.