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Thursday, March 5, 2015

What Investing In Too Big To Fail Means For Banking Investors

SeekingAlpha recently published one of our articles entitled "What investing In Too Big To Fail Means For Banking Investors." See below for a quick summary or click here to read the full article.
  • Due to banking reforms, institutions with a higher risk rating must also hold a higher percentage of capital in reserve to make up for the increased risk.
  • Based on a 7 point scoring framework, 33 banks make the cut for having the highest systematic risk.
  • Of the 33 banks, 5 have the highest risk of contagion. These are Citigroup (NYSE: C), JPMorgan (NYSE: JPM), Morgan Stanley (NYSE: MS), Bank of America (NYSE: BAC), and Goldman Sachs (NYSE: GS).
  • While these banks provide reduced risk to investors through an implicit government backing, the cost of this protection is a higher reserve requirement and greater regulatory scrutiny. 
http://seekingalpha.com/article/2977346-what-investing-in-too-big-to-fail-means-for-banking-investors?isDirectRoadblock=false&uprof=52

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