Tag Archive | AXP

5 ETFs Influenced By Global Banking Regulations

Recently, global regulators pushed through increased world banking regulations which will force financial institutions to increase reserves protecting against unexpected losses, with the effects influencing iShares S&P Global Financials (IXG), SPDR S&P International Financial Sector (IPF), the iShares MSCI ACWI ex US Financials Index (AXFN), the Financial Select Sector SPDR (XLF) and the Vanguard Financials ETF (VFH).

More specifically, the new rules are designed to rein in the kinds of risky activities that aided in bringing down the global financial system.  The primary focus of these new rules is the amount of capital that financial institutions are forced to hold.   More specifically, regulators agreed to require banks to hold a specific level of a basic type of capital known as common equity, which is considered the most effective type of capital because it is used to directly absorb losses.  Furthermore, officials agreed large, internationally active banks will have to hold levels of common equity equal to at least 7% of their assets, much higher than the roughly 2% international standard or 4% standard for large U.S. banks. Read More…

Financials Could Pose Opportunity

By Kevin Grewal

The global financial sector was at the epicenter of the worldwide economic meltdown, but as economies start to recover and show signs of economic expansion, the financial sector is likely to reap the benefits.

Some positive forces that are likely to bolster the financials include an improved housing market, a boost in consumer confidence, an increase in consumer spending, fiscal stimulus initiatives funded by the federal government, an increase in business investment and healthier credit markets. Read More…

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