I
mentioned in a previous blog the Dodd-Frank Act of 2010, which was
supposed to make banks stronger, among its other panacea provisions,
and I noted the credit-rating agency downgrade despite the
legislation.
There is yet another way to measure the fact that big banks are not deemed as secure by investors as they were before the Dodd-Frank Act. Simply look at the cost of insuring bank debt.
The cost of insuring $10 million of debt for five years is an excellent indicator that’s available with regard to the credit standing of major banks. And it’s been high, at least as an investors’ perception of that risk.(See the Earl J. Weinreb NewsHole® comments.)
There is yet another way to measure the fact that big banks are not deemed as secure by investors as they were before the Dodd-Frank Act. Simply look at the cost of insuring bank debt.
The cost of insuring $10 million of debt for five years is an excellent indicator that’s available with regard to the credit standing of major banks. And it’s been high, at least as an investors’ perception of that risk.(See the Earl J. Weinreb NewsHole® comments.)
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