, Columnist
With Sun in Their Eyes, Banks Cut Rainy Day Funds
Lower loan loss reserves bolster profits but erode protection.
Banks see sunny days they don’t think will ever end.
Photographer: Andreas Rentz/Getty Images
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Banks have become too safe.
That is a chief justification cited by lawmakers to roll back the Dodd-Frank banking regulations and loosen other financial rules. The Senate passed a bill in March, and Speaker Paul Ryan said earlier this week that he had a deal to push the measure through the House. But at least one layer of protection that banks typically rely on when financial storms come is the thinnest it has been in more than a decade, nearly back to where it was when the housing bust started the downpour that nearly wiped out the big banks.