Wells Fargo, Mike Mayo
Mayo is keeping a “watchful eye on political and regulatory risk,” and will closely follow the CEO testimony. “The hearing has the potential to shape the narrative” for legislation, he said in a note, and offers “a justified look back after such a terrible financial crisis.”
Possible topics include: Lending; buybacks; whether banks are too big to fail/manage; regulation on issues like safety and soundness and protecting the Dodd-Frank Act, and compensation, for both executives and employees.
KBW, Brian Gardner
“Goldman Sachs’s involvement in the 1MBD scandal will probably be the focus of numerous questions as will issues like potential changes to the Volcker rule and CEO pay,” Gardner wrote in a note.
“The main thing for investors to keep in mind is that the hearing is likely to generate negative headlines for the sector but it is unlikely to result in policy changes.” He sees current policy as “a tailwind for banks,” and as likely to hold steady at least through the 2020 elections.
This article was provided by Bloomberg News.