Warsh Effect: High Rates Lift Bank Profits But Increase Credit Risks
The post Warsh Effect: High Rates Lift Bank Profits But Increase Credit Risks appeared on BitcoinEthereumNews.com. America’s eight globally systemically important banks are posed to deliver very strong earnings. getty The upcoming second-quarter earnings season for globally systemically important U.S. banks looks like a victory lap. Driven by a spectacular resurgence in Wall Street dealmaking and an unexpected boost from a “higher-for-longer” interest rate environment, the banking sector is flashing green. According to the latest Zacks Earnings Trend Report, overall earnings for the broader finance sector are projected to surge by 12.5% year-over-year on 8.1% higher revenues. America’s GSIBs are expected to post staggering double-digit EPS growth. A massive catalyst for this boom was a blockbuster quarter for equities and trading desks, supercharged by the historic, nearly $86 billion SpaceX IPO, which alone pumped roughly $500 million in banking fees into Wall Street. Meanwhile, comme