Fed plan to ease leverage rule offers windfall for big US banks, Morgan Stanley says
1. Federal Reserve plans could free up $185 billion for U.S. banks. 2. Nearly $6 trillion in balance sheet capacity may be unlocked.
FAQ
Why Bullish?
The potential increase in capital and balance sheet capacity aligns with BAC's growth strategy. Historical instances, such as the post-2008 financial crisis environment, show that relaxed regulations can enhance bank profitability.
How important is it?
The infusion of capital and increased capacity can directly benefit BAC's operations, fostering investor confidence and potentially improving share price.
Why Short Term?
The immediate removal of leverage constraints could affect BAC's pricing within the next few quarters, given market reactions to regulatory changes.