How's Wall Street Doing 5 Years After Crisis?

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Sept. 13 (Bloomberg) -- Bloomberg's Dawn Kopecki reports on Wall Street five years after the financial crisis. (Source: Bloomberg)


We want to look at all of the changes.

First, i want to talk about the stock.

Even if you look at bank of america or citigroup, they are considerably lower than they were five years ago.

Many other banks have come back.

They have.

If you had invested in them in 2007, you would not have necessarily made all your money back or just barely.

But they have recovered.

They all have probably twice as much capital as they used to have.

If you look at the actual capital ratios, it is not twice as high.

But because certain things that used to count as capital no longer count as capital.

They are much more well- capitalized now, much more liquidity.

That is partly because the regulations have all become a lot tighter for the banks.

Dodd frank passed.

You have a host of new regs from the fed.

International bank capital rules.

That is depressing stock prices a bit.

When we talk to investors, they say the overhang on these companies is not just current regulation but implementation of future regulation and uncertainty about the effect that will have.

Also, all the capital requirements are suppressing a much dividends they can pay out.

That is also having an effect on stock price.

People worth first -- people were first thinking obama was talking a tough game to win a follow-through on tougher regulations, but they are.

Looks like no matter who is president in the next couple of years after obama leaves office, it looks like that person, or at least the regulators themselves, will keep him posing these tough standards on the banks.

That is depressing their prices.

What do you see in terms of their profit outlook as a result of all these requirements?

The profitability is fairly bleak.

They went from being these huge money makers to what brian moynihan of bank of america has described as a utility company.

He has been divesting u.s. noncore holdings so that they can focus on their core business of lending and checking accounts and things like that.

You are not seeing a double- digit earnings growth picture for the banks here it more single digits.

Mike mayo of credit suisse has said this will be the worst couple of years of growth for the industry since the great depression.

So the industry , it is not a fantastic time, but they are still on the mend.


Perhaps this is exactly with the regulators

This text has been automatically generated. It may not be 100% accurate.


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