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- New Cyberattack Goes Global, Hits WPP, Rosneft, Maersk
- Deutsche Bank Said to Lose as Much as $60Mn Over Derivative Trade
- Dimon Says JPMorgan Headcount to Keep Rising Despite Automation
- RBS to Cut 443 Jobs In UK, Move Many of Them to India
- Deutsche Bank Bullish on London Despite Brexit
- Supreme Court Nears Finish With Big Cases, Retirement Rumors
- The Richest Person in Every State
- LPL Tabs Scott Seese, Former eBay Exec, as Chief Information Officer
- Fired Biglaw Associate Arrested for Trying to Extort Partners
- Canada's CIBC Completes $5Bn PrivateBancorp Buy
- Word ‘Women’ Literally Never Appears in U.S. Senate’s 142-Page Health-Care Bill
- Stephen Pierce, Goldman Sachs Global Head of Equity Markets, To Retire
- Al Gore 'Not Very Smart,’ But Became Filthy Rich Using Simple Investing Formula - Charlie Munger
- U.S. Regulators, Lawmakers Support Volcker Rule Revamp at Hearing
- Morgan Stanley Opts for Frankfurt as New EU Hub
- A New Risk for Goldman, Morgan Stanley in Stress Tests (subsc reqd)
- A Trump Bump for Law Firm of President’s Lawyer - Kasowitz Benson Torres
- JPMorgan, BofA, Goldman, Citi, Wells Fargo Pass Fed's Stress Test
- Blackstone Stock Still Trading at $31 - Its IPO Price From 10 Years Ago
- NJ Resident and NY-Based Global FX Club Charged with Solicitation Fraud, Misappropriation - CFTC
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NEWSLETTERS & ALERTS
Big Bank Share Prices to Sag in 2017
[Photo: CNN Money]
In an interview with NBC, noted Wall Street analyst Dick Bove of Rafferty Capital expressed a bearish attitude about the prospects of bank shares. Looking at hard data, he said, it's clear that the banking industry is doing poorly - to such an extent that it will more than outstrip any benefits that may be derived from the anticipated increase in interest rates.
Bove counters the increasing talk about dergulation, with the statement that the Trump Administration is actually "increasing, increasing, increasing regulation in the banking industry." That includes a new accounting rules that will be in effect as of year's end - and will fully actuate in 2020 - which will have the actual effect of knocking down areas of the industry by 20%.
WHAT IS THAT ACCOUNTING RULE? Last June, the Financial Accounting Standards Board (FASB) issued a new accounting rule that will require U.S. banks to book losses on soured loans much faster and, in turn, force them to set aside more in reserves.
Banks will have to record all losses they project over the lifetime of their loans as soon as the loans are made. That is a change from current practice, under which banks wait to record loan losses until there is evidence a loss is likely to occur. The rule goes into effect in 2020 for publicly traded banks, and in 2021 for privately-held ones.