Bank stocks slip ahead of Obama regulation plan
The administration wants to close the gaps that led to last year's financial crash.
Bank stocks were generally lower today, ahead of a speech by President Barack Obama Wednesday that will offer details on how to shore up regulation of the nation's financial regulatory structure.
The S&P 500 financial sector exchange-traded fund -- technically the Select Sector SPDR-Financial (XLF) ETF -- fell 1.7% to $11.96. Bank of America (BAC) was down 4.5% to $12.73. JPMorgan Chase (JPM) dropped 1.5% to $33.50.
The administration wants to close the holes and gaps that led to last fall's financial crash, the worst financial crisis in the post-World War II period.
The proposal is expected to include a number of elements, including:
- The Federal Reserve could regulate any large institutions whose failure could threaten the stability of the financial system. There was no such structure in place last year when Lehman Bros. failed and American International Group (AIG) avoided collapse only with massive amounts of government aid.
- A council of regulators with broad coordinated responsibility across the financial system would be established.
- Issuers of asset-backed securities would have new reporting requirements. That way, regulators and managements alike would have a better sense of how vulnerable the financial system might be.
The idea behind the proposal is to create a new way to seize and unwind troubled large firms that are not banks and avoid the haphazard approach to crises, such as last year's costly bailout of insurer American International Group.
There has been criticism that the U.S. patchwork of financial regulators enabled the risky behavior of the banks and other companies to go unnoticed.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market finished the Wednesday session on an upbeat note with the Nasdaq (+1.3%) ending in the lead. The S&P 500 settled higher by 1.1% with all ten sectors posting gains.
The benchmark index spent the entire trading day in the green, rallying to new highs during the last hour of action. The tech-heavy Nasdaq, meanwhile, briefly dipped into the red during morning action, but was able to recover swiftly.
Stocks began the trading day with modest gains ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
VIDEO ON MSN MONEY
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'