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Stories of Interest
- SEC Charges Additional Defendant in Fraudulent ICO Scheme
- Warren Buffett Simply Blew it on Wells Fargo Stock: Dick Bove (Video)
- Barclays and Deutsche Bank to Lag U.S. Trading Peers
- NY AG Schneiderman Seeks to Close Loophole That Could Let Trump Pardons Block State Charges
- 'Fearless Girl' is Moving to NYSE After Year Staring Down 'Charging Bull'
- What's In Your Wallet - American Express Shares Soar After Earnings Release
- Deutsche Bank's Executive Departures Continue Following Change in CEO
- Reflections of an Economist Commissioner (SEC's Piwowar)
- Billionaire HF Manager and The Fed Chair Runner-Up are Investing in New Cryptocurrency
- Court Finds 2 Brokers Liable for Fraud Involving Mortgage-Backed Securities
- One FINRA: An Organization’s Commitment to Diversity and Inclusion
- 2018 GASB Accounting Support Fee to Fund the Governmental Accounting Standards Board
- Barclays Eyes Move Into Cryptocurrency Trading
- Goldman Breaks From Wall Street Pack with Bond-Trading Boom
- Janney Montgomery Scott CEO Joins FINRA Board of Governors
- SEC Encourages Investors to Do Background Checks on Investor.gov
- The Martin Act: Wall Street Titan Takes Aim at Law That Tripped Him Up
- Bank of America’s Cost-Cutting Drive Pushes Profit to Record
- Larry Fink: Wall Street’s $6 Trillion Man Finally Worth $1Bn
- Activist Investor Wants Barclays Investment Banking Overhaul (Video)
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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.