Exposed! Why Financial Reform Could Benefit Banks (Fool TV)

As the financial reform movement gathers steam in Washington, big banks are complaining that proposed laws will cost them billions of dollars. That's because they may have to hive off their risky derivative and swaps desks -- the very businesses blamed for exacerbating the meltdown in mortgage-backed securities.

James Early, lead advisor of Motley Fool Income Investor, says that while banks do stand to lose a boatload in annual revenues from such re-regulation, they would also benefit greatly by shedding trillions of dollars in exposure from their derivatives portfolios. Contrary to what banks might want us to believe, all this could actually make banks like Goldman Sachs (NYSE: GS  ) , Bank of America (NYSE: BAC  ) , and Citigroup (NYSE: C  ) even more attractive as investments going forward.

But if it turns out the new regulations require banks to serve as backstops for a derivatives market in which they can't participate, be afraid -- be very afraid. Watch the video here:

For more from Fool TV:

James Early does not own shares of any company mentioned. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1175418, ~/Articles/ArticleHandler.aspx, 10/25/2016 10:30:33 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 hour ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 4:00 PM
BAC $16.72 Down -0.05 -0.30%
Bank of America CAPS Rating: ****
C $49.59 Up +0.01 +0.02%
Citigroup CAPS Rating: ***
GS $175.55 Up +0.43 +0.25%
Goldman Sachs CAPS Rating: ***