S&P says Dodd-Frank may cost Big Banks $34 Billion annually

Dodd-Frank Cartoon posted in MHProNews.com

ComplianceWeek tells MHProNews about a new report, “Two Years On, Reassessing the Cost of Dodd-Frank for the Largest U.S. Banks,” Standard & Poor’s Ratings Services (S&P) updated its prior estimate of what new regulations may cost Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, PNC Financial Services, U.S. Bancorp, and Wells Fargo. It says these “large, complex” institutions “will bear the brunt of the financial impact.” Dodd-Frank Act could reduce pretax earnings for these eight mega-banks by $22 billion to $34 billion annually. The previous estimate was $19.5 billion to $26 billion. S&P credit analyst Matthew Albrecht stated, “Considering what we know now about rules and regulations that have yet to be implemented, and based on our current forecasts for banks’ capital and earnings, we don’t believe the financial impact of regulatory reform will, in itself, affect our ratings on the eight large U.S. Banks.” Albrecht added, “However, proposed rules and regulations could change our assessments of banks’ business or risk positions, which could ultimately lead to rating actions in isolated cases.” MHProNews notes that small to mid-sized financial institutions also have their challenges and concerns about the costs of the regulatory and compliance burdens they face as a consequence of Dodd-Frank. ##

(Graphic credit: Mountainseed-Dodd-Frank Cartoon)

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