Lower Leverage Rules Boost Bank Stocks

Deutsche Bank (DBKGn.DE) and Barclays (BARC.L) led European bank stocks on Monday to their highest for nearly three years after regulators watered down new rules aimed at strengthening banks but which could have limited their ability to lend.

Sunday’s decision by the world’s top central bankers was aimed at trying to avoid restricting financing for the global economy, and was seen as a positive for banks, especially those with big investment banking arms.

The easing of the rule, after lobbying by banks, is the latest sign of how regulators have become more willing to accommodate lenders as the focus switches to helping economic recovery.

The STOXX Europe 600 Banking index .SX7P was up 1.4 percent at 205.2 points by 1100 GMT, its highest level since April 2011 and extending this year’s rally to 6 percent. The index is up 26 percent since the start of 2013.

Shares in Deutsche Bank and Barclays were each up more than 3 percent, and UBS (UBSN.VX), Unicredit (CRDI.MI) and Royal Bank of Scotland (RBS.L) were each up more than 2 percent.

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza