Bank stocks and financial sector exchange traded funds climbed Friday on reports that President Donald Trump is ready to undo regulatory restrictions on the industry.
On Friday, the PowerShares KBW Regional Bank Portfolio (NYSEArca: KBWR) gained 2.6%, SPDR S&P Regional Banking ETF (NYSEArca: KRE) rose 2.4%, SPDR S&P Bank ETF (NYSEArca: KBE) increased 2.4% and First Trust NASDAQ ABA Community Bank Index Fund (NasdaqGM: QABA) advanced 2.3%.
Meanwhile, the broader iShares U.S. Financial Services ETF (NYSEArca: IYG) returned 2.4% and Financial Select Sector SPDR (NYSEArca: XLF) was 1.8% higher.
The financial sector, notably bank stocks, strengthened on prospects that Trump would sign an executive action Friday that would establish the framework to scale back the 2010 Dodd-Frank financial-overhaul law, part of the administration’s plan to dismantle much of the regulatory system enacted after the financial crisis, the Wall Street Journal reports.
“Americans are going to have better choices and Americans are going to have better products because we’re not going to burden the banks with literally hundreds of billions of dollars of regulatory costs every year,” White House National Economic Council Director Gary Cohn told the WSJ. “The banks are going to be able to price product more efficiently and more effectively to consumers.”