A decade after the 2008 financial crisis, U.S. banks are at an inflection point. They are posting record profits thanks to rising interest rates, reduced regulation and a lower federal tax bill. Nevertheless, financial institution share prices have been laggards because of investor concerns that the rising interest rates will lead to increased costs as banks compete for customers seeking higher returns on deposits. At the same time, higher interest rates are dissuading some borrowers from taking out new mortgages and other loans. Nonbank lenders are also winning away customers for mortgages and business loans from traditional banks. Eight years after adoption of the Dodd-Frank financial regulation law, which was aimed at preventing bank failures that require taxpayer bailouts, Congress and the Trump administration have begun rolling back some of the restrictions.read full report
The first step in successful business research.
Read the Latest Issue
Will rising interest rates ultimately hurt profits?
Financial institutions such as Citigroup, headquartered in New York City, have grown larger since the financial crisis and are reaping rising profits. (Scott Eells/Bloomberg via Getty Images)