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S&P: Dodd-Frank not to affect ratings on largest U.S. banks

08-10-2012 07:34 BJT

NEW YORK, Aug. 9 (Xinhua) -- Ratings agency Standard &Poor's said Thursday that new regulations under the Dodd-Frank Act will not affect the ratings of the largest U.S. banks.

The S&P made the announcement in a research article entitled " Two Years On, Reassessing The Cost Of Dodd-Frank For The Largest U. S. Banks."

The article said that although it had been two years since the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) was signed into law, many rules were still not in place or final.

"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," said Standard &Poor's credit analyst Matthew Albrecht. "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."

The eight largest U.S. banks are Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, PNC Financial Services, U.S. Bancorp, and Wells Fargo, which S&P believed will bear the brunt of the financial impact.

The firm estimated the DFA regulations could reduce pretax earnings for the eight banks by a total of 22 billion dollars to 34 billion dollars annually, higher than previous estimates of 19. 5 billion dollars to 26 billion dollars.

"Most of the higher estimate reflects our view that regulators could take a more strict interpretation of the Volcker Rule than we previously expected. We expect most final rules to be in place and affecting results toward the end of 2013 or the beginning of 2014, as regulators implement the provisions," Albrecht said.



Editor:James |Source: Xinhua

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