June Could Be a Big Month for Bank Stocks
As if the last few months weren't big enough for bank stocks, the sector is staring down what could be another significant month in June as it awaits new regulatory requirements and stress-testing results from international and domestic regulators.
Banks must set aside capital when they take on risk through activities such as lending and trading, and regulatory capital is huge in banking. It impacts a bank's appetite for lending, bank returns, and how much capital banks can return to shareholders. Here's why June will likely be a big month for bank stocks.
The first proposed regulatory capital changes that could be released this month are referred to as the Basel III Endgame. The Basel Committee on Banking Supervision is an international body composed of regulators from all over the world that takes the lead on setting global bank regulations. Basel III Endgame is a set of revisions to Basel III, which is an international framework of regulations implemented in 2017 in response to what happened to the global banking system during the Great Recession.
Source Fool.com
