BlissPR’s Financial Services Practice Group Brings You Our Two Cents on this Week’s Financial News
It’s a busy week in financial services – this week’s roundup highlights the news of the House’s passing of the historic health bill, Bernanke’s comments about the Fed’s oversight of banks, and more FDIC takeovers of community banks. We’ll be watching, along with investors, all of these developments closely this week:
Markets: And the votes are in. The historic health bill won approval on Capitol Hill late last night as the votes broke down as 212 against and 219 in favor of Obamacare. We’ll wait to see how the markets, especially the bond market, reacts today on the news but according to Legg Mason fund manager Bill Miller, cheap U.S. health stocks should perform well in the near term, now that there is less uncertainty in the sector. Big businesses, however, may disagree and many worry the bill will do more harm than good as the legislation may do little to nothing to hold down their healthcare costs and may even force the costs up. How do you anticipate these businesses will compensate for the extra costs? Will they cut back on the number of workers they hire, will they make provisions to their retiree healthcare costs?
Banking: In a speech over the weekend, Ben Bernanke, Chairman of the Fed argued that the Fed should retain its powers to oversee small and medium-size community banks. Bernanke believes that the Fed needs to supervise banks of all sizes so it can spot potential threats to the financial system. During the speech, he also recognized the dangers posed by giant banks, saying they are larger than before. For more on the speech please click here
Bankruptcy: Last week was a big week in bank closures with seven banks closing its doors, bringing the total this year to 37. The banks are based in Alabama, Georgia, Minnesota, Utah and Ohio. We’re nearing the end of the first quarter, and although numbers are not as high as 2009, the recovery does not seem to be in sight for small and mid size banks.
It won’t be a dull week for financial services – continuing the pattern of the past several years. Stay tuned for next week!
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