For instance, banks with a Systemically Important Financial Institution designation had to adhere to stricter rules and oversight on the basis that their failure was seen as a danger to the economy. The new increased threshold to $250 billion in assets from $50 billion would affect several large regional banks, including BB&T, Fifth Third Bank, and SunTrust, which would no longer be subject to the more stringent SIFI rules, according to Business Insider.
Rolling back some of the regulatory rules could have a positive impact on the financial sector and related ETFs, such as the Financial Select Sector SPDR (NYSEArca: XLF), Fidelity MSCI Financials Index ETF (NYSEArca: FNCL), iShares U.S. Financials ETF (NYSEArca: IYF) and Vanguard Financials ETF (NYSEArca: VFH).
In particular, banks could capitalize on the regulatory rollbacks. For bank exposures, investors can look to options like the iShares U.S. Regional Banks ETF (NYSEArca: IAT), SPDR S&P Regional Banking ETF (NYSEArca: KRE), PowerShares KBW Regional Bank Portfolio (NYSEArca: KBWR) and SPDR S&P Bank ETF (NYSEArca: KBE), which take a larger focus mid- and small-sized regional banks.
For more information on the financials sector, visit our financial category.