The life of a bank CEO is about to get a lot harder.
Fed Vice chair Michael Barr announced plans Monday for stricter capital requirements and more stringent stress testing for banks. The goal is to prevent another crisis, but Josh Steiner says the proposed changes are exactly what the industry had feared.
“For the banks themselves, this is going to hurt,” explains Hedgeye’s Financials analyst in this clip from The Call @ Hedgeye. “It’s going to reduce their returns on capital. It’s going to force them to think about risk weightings. It’s also, in the interim, going to negatively affect capital returns.”
Steiner adds: “It’s going to continue to create a more challenging macro backdrop, not just over the next couple of months, but over the next couple of years.”
Watch the full clip above.
