Banks Breathe Sigh of Relief as Capital Requirements Imposed by Central Bankers

Bank shares experienced a rise in early afternoon trading as reports indicated that traders were becoming less concerned about the impact of additional capital requirements imposed on banks. A pact announced by the world's central bankers to introduce an extra 2.5% in tier one common equity on top of the existing 7% agreed upon by international bankers was seen as less burdensome than initially thought. This change led to increases in shares of major U.S. banks such as BAC, C, JPM, STT, and WFC.

Key Takeaways:

• The world's central bankers have agreed to impose an additional 2.5% in tier one common equity on banks, on top of the existing 7% agreed upon by international bankers.
• This new level of capital requirement is seen as less burdensome to banks than initially thought, leading to a rise in bank shares such as BAC, C, JPM, STT, and WFC.
• BAC shares rose by 3%, while C, JPM, STT, and WFC shares increased by 1-2% in early afternoon trading.
• The pact was announced on Saturday, indicating a swift response to the banks' concerns.
• The move aims to strengthen the banks' capital base and ensure stability in the financial system.

Statistics:

• The new capital requirement of 9.5% (7% + 2.5%) is set to be imposed on banks.
• BAC shares increased by 3% in early afternoon trading, with a price of $10.83 and a change of $0.31, representing a 2.9% percent change.
• C shares rose by 1% with a price of unknown, while JPM, STT, and WFC shares increased by 1.1-2% respectfully.
• The Dow Jones report cited the new level of capital requirement without specifying the exact date of the announcement.

Sources:

• MidnightTrader via COMTEX (Jun 27, 2011)
• Dow Jones report (no specific date mentioned)
• Comtex SmarTrend Alert (as of Thursday, 06-23-2011 23:59)