Big banks under pressure, Fed updates capital requirement proposals

Big banks are under pressure after Federal Reserve Vice Chair for Supervision Michael Barr revealed updated capital requirement regulations for banks in a speech on Tuesday morning. The updated proposal dramatically scales back the proposed capital requirements for banks.

Market Domination Hosts Julie Hyman and Josh Lipton report more on the story and dig into some of the headwinds facing the sector.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Melanie Riehl

Video Transcript

It's what's going on with the banks.

Yeah, I mean, to me, it was almost like there was like two real kind of themes sectors.

I was watching one was tech and you point out you could see the NASDAQ app perform today.

That's an oracle just ripping and surging.

The other was the banks because we did get this morning.

It was interesting.

I had the headline new capital requirements.

You thought of that maybe would have put a smile on some traders faces, but I think other comments by bank just kind of weighing on sentiment today for sure exactly the capital requirements from the Federal Reserve going to be 9% in terms of the amount they have to increase the reserves against losses.

Originally, that plan was something like 19%.

There was some suggestion, maybe that was priced in, but there's also a Barclays financial services conference.

And at that conference, JP Morgan, President Daniel Pinto said the street might be a little too sanguine rosy, rosy about net interest income and about expenses.

And so we saw the stock fall on that, that uh on top of Goldman Sachs also coming out and talking about trading being a little challenged.

It's taking a write down still on raising revenue, drop 10%.

Exactly.