Analysts at JPMorgan have calculated that if the full burden of regulatory and political initiatives to crack down on banks’ risks is implemented, it would cut the average return on equity from a projected 13.3% to 5.4%. The conclusion is a stark illustration of what might happen if all of the proposals mooted by governments in the US, UK and France were put into effect globally at the same time as the overhaul of capital and liquidity standards being engineered by regulators on the Basel Committee on Banking Supervision. The authors concede that such an extreme scenario, which would also entail the world’s 16 leading banks (excluding JPMorgan itself) having to raise an estimated $221bn, or $14bn apiece on average, is unlikely to occur in practice.
Doomsday regulation scenario laid out
Most Popular Articles
Latest Articles
Reverse mortgages seen as a path forward for lenders
Leaders at Guild Mortgage and Guaranteed Rate explained some of their approaches to the reverse mortgage business during The Gathering.
-
Blend receives $150M infusion from Haveli Investments
-
Michigan attorney general reissues reverse mortgage consumer alert
-
eXp Realty makes changes to its executive team
-
Housing affordability dipped in March: First American
-
Title insurance executives are confident the Biden proposals won’t come to much