Could increased regulation extend the trend of bank difficulties?
*Financial Times, by Simon Mundy, December 16, 2011:
''Fitch downgrades seven leading banks
Fitch Ratings has cut its long-term ratings for seven major banks in
Europe and the US, warning that big financial institutions 'are
particularly sensitive to the increased challenges the financial
markets face.'
BNP Paribas and Deutsche Bank both had their long-term issuer default
rating downgraded by one notch to A plus, while Bank of America,
Citigroup and Goldman Sachs were downgraded from A plus to A.
Barclays and Credit Suisse were downgraded by two notches to A, Fitch
announced on Thursday evening.
'Over time market conditions are likely to ease, but Fitch expects
market volatility to remain above historical averages and economic
growth in developed markets to remain subdued for a prolonged
period. This makes many business lines in securities operations
more difficult, due to lower activity and higher funding costs,' said
Fitch, the smallest of the three major rating agencies.
While it noted their progress in building up capital and liquidity
buffers, Fitch warned that new regulation could exacerbate the banks'
difficulties by restricting their earnings potential and increasing
costs.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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