While Bank equities are getting traded across the board, US Banks are suffering significant declines in their Investor Margins as Bank Investors fears strengthen ground. The Investors fear that in addition to an already-difficult operating Bank environment, their Bank profitability will ultimately suffer. The entire Banking Stocks might see new bottom formations as a consequence of the US Fed’s new "operation twist," which seeks to flatten the United States of America's yield curve. US Fed's can do this by switching its bank portfolio mix of treasury securities increasingly toward longer dated deposit maturities. Additionally the Fed will reinvest the principal it receives from maturing financial bank mortgage bonds into additional mortgage securities in hopes of lowering mortgage rates even further. While it hopes to boost investment in the Investment Banking Stocks and consumption pattern with these moves, the Fed’s actions could also put pressure on bank profitability by squeezing the margin between the short term rates at which they borrow and the longer term rates at which they lend. In addition to this, much uncertainty remains among banks regarding Dodd-Frank rules still being implemented by regulators.
However, despite all the work still ahead for the banking industry in the United States, many banks today are in much better shape than they were three years ago in the throes of the financial crisis as a result of the actions they’ve undertaken during this period.
However, despite all the work still ahead for the banking industry in the United States, many banks today are in much better shape than they were three years ago in the throes of the financial crisis as a result of the actions they’ve undertaken during this period.
