Related: Tax Reform Plan Could Have a Treat for Banks
Deregulation could also help the financial sector improve their margins. President Donald Trump’s administration has shown its eagerness in cutting back the red tape and remove some of the post-financial crisis regulations that has stifled the industry.
“Most of the U.S. banks we rate are benefiting from rising interest rates. They have been able to increase net interest margins and could benefit from further rate rises. However, if a flatter yield curve persists net interest margins will come under pressure, and it could hinder earnings growth,” according to Fitch Ratings.
Capital levels at major U.S. banks are viewed as solid. Additionally, the Trump Administration’s tax reform effort is seen as a potential catalyst for the financial services sector, but it remains to be seen if that effort will come to life.
For more information on the financial sector, visit our financial category.