Reported about 5 hours ago
According to Deutsche Bank, a rally in bank stocks since late September could compel major US financial institutions to further limit their activities in the repurchase agreement and foreign exchange derivatives markets. The rise in bank share prices impacts their regulatory scores, potentially increasing the capital they need to hold. Consequently, banks may reduce their derivative and repo activities to mitigate the risk of higher surcharges. Deutsche Bank warns that the pressure to cut year-end activities will be most significant for those banks whose scores have increased, estimating substantial reductions needed in repo and foreign exchange activities to offset stock price impacts.
Source: YAHOO