Economy
Bank of America Corp and why more regulation is costly |
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| Economy | |
| Written by Roberta Murray | |
| Thursday, 17 June 2010 | |
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Morning Business News, Thursday 17 June: Bank of America Corp, JPMorgan Chase, new banking regime in the UK and BP shares surge.
Bank of America Corp (NYSE:BAC), and other US banks, may introduce new fees on basic services and eliminate free checking accounts to replace revenue lost to new banking regulations. Banks incur an expense of between $250 and $300 a year to maintain each of the roughly 200 million checking accounts, the paper said citing industry estimates. Bank of America may lose more revenue than most other big banks because it is in the process of dismantling its checking-overdraft program in the face of new restrictions. JPMorgan hopes to cash in on ChinaJPMorgan (NYSE:JPM) aims to double revenue from Asia as it taps growth in the region and co. plans to double its number of branches in China, according to co.’s vice-president and CEO of treasury and securities services. UK regulatory shakeupMervyn King became the most powerful governor of the Bank of England in living memory today after George Osborne gave him sweeping powers to curb City excesses and prevent another financial crash. King emerged as the big winner from the chancellor's shakeup of supervision that will abolish the Financial Services Authority and do away with the tripartite system of regulation introduced by Gordon Brown in 1997, writes the Guardian. The Telegraph adds that Hector Sants, the City watchdog who quit amid proposals to abolish the Financial Services Authority, is to stay on to affect the biggest shake-up of financial regulation since 1997. BP shares shoot upBP Plc (LON:BP) shares are over 8% higher in morning trade in London. The boost comes as a clearer picture of BPs financial liabilities become clear. BP has suspended dividend payments for the rest of this year and moved to slash its capital expenditure bill after agreeing to finance a $20bn (£13.5bn) clean-up and compensation fund for the Gulf of Mexico oil spill, says the Telegraph. The decision, which comes after weeks of speculation over the fate of the annual $10.5bn payment, will hurt major pension funds as BP’s payout accounts for roughly one sixth of their blue chip dividend flows in the UK. Investors had been expecting the first quarter dividend to be paid on June 21.
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