Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Financial Stocks Roundup: Banks Fight Credit Exposure Rules


The Fed heard arguments from several Wall Street CEOs about a rule limiting counterparty risk

MINYANVILLE ORIGINAL JPMorgan Chase's (JPM) Jamie Dimon said that the meeting between regulators and bank CEOs at the New York Fed today resulted in "give and take."

Along with Dimon, Morgan Stanley's (MS) James Gorman, Bank of America's (BAC) Brian Moynihan, and State Street's (STT) Joseph Hooley were seen heading to the meeting.

Dimon told Bloomberg that "everything" could have been on the agenda before entering the meeting. One topic that will likely be discussed is the particularly vague methodology of the "stress tests" that simulate extremely adverse economic conditions to test the steadfastness of banks' Tier 1 capital ratios. Passing the test is prerequisite for raising dividends.

The bankers are also objecting to a proposed rule limiting counterparty risk. If this regulation was put into place, systemically important banks will have to limit credit exposure to one another to just 10%. The Dodd-Frank law only mandates a 25% cap. The banks argue that this cap would limit credit and liquidity.

Goldman Sachs (GS) claims that the rule would reduce economic growth by 0.4% and cost the country 30,000 jobs.

Financial stocks are underperforming the S&P 500 (SPY) today. The Financial Sector Select SPDR ETF (XLF) is down 0.74% today. A private measure of job creation in April fell short of even the most bearish estimates and factory orders in the US slipped less than expected in March.

Goldman Sachs CEO Lloyd Blankfein is an outspoken advocate for gay rights. He has even starred in an ad for the Human Rights Campaign. Wall Street's firms have some of the most progressive policies for LGBT employees. However, Blankfein says, Goldman's support for gay marriage is "not without a price."

"There was some adverse reaction by someone," he said. "They didn't want to continue a relationship that they had with us in money management ... I won't say the name but if you heard the name it wouldn't surprise you."

Twitter: @vincent_trivett
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Featured Videos