What's Going On With Bank Of America Stock Tuesday

Author: Anusuya Lahiri | June 06, 2023 11:42am

• Bank Of America Corp (NYSE:BAC) and peers are trading higher Tuesday amid reports of up to 20% hike in capital requirements.
• U.S. regulators look to order large banks to shore up their financial footing to boost the system's resilience after a spate of midsize bank failures this year.
• By June, the regulators are on track to propose a rise in overall capital requirements by roughly 20% at larger banks on average, a shift from the lighter regulatory approach taken during the Trump administration.
• The precise amount will depend on a firm's business activities, with the most significant hikes likely for U.S. megabanks with big trading businesses.
• Banks heavily dependent on fee income—like investment banking or wealth management—could also face significant capital boosts.
• Three agencies - the Federal Reserve, Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency will likely propose and seek comment on the capital rules.
• Regulators will likely propose ending a regulatory reprieve that had allowed some midsize banks to effectively mask losses on securities they hold, a contributing factor in the collapse of SVB Financial Group (OTC:SIVBQ).
• Other bank stocks, including Citigroup, Inc (NYSE: C), U.S. Bancorp (NYSE: USB), and Wells Fargo & Co (NYSE: WFC) stocks, are also trading higher Tuesday.
• Price Action: BAC shares traded higher by 2.77% at $29.32 on the last check Tuesday.
• Photo via Wikimedia Commons

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