US investment banking performance

The five largest US investment banks garnered total advisory and underwriting fees of $7.7 billion in 3Q17, up 8% YoY and higher than average quarterly fees of $7.2 billion since 2013. The healthy rise in investment banking fees is indicative of banks’ strong performances. However, the figure represents a 5% decline over the previous quarter despite a 1% rise over the global industry-wide investment banking fees.

US Regulator Wants to Allow More Companies to Offer Banking Services

J.P. Morgan (JPM) dominated the global league table for the fifth consecutive quarter though its share fell from 8.1% in 3Q16 to 7.0% in 3Q17. Goldman Sachs (GS) and Morgan Stanley (MS) improved their market share, while Bank of America (BAC) and Citigroup (C) lost some of theirs.

Regulator called for new banking licenses

At a banking conference in New York, acting OCC (Comptroller of the Currency), Keith Noreika, called for a debate to discuss whether more companies should be able to offer traditional banking services. New regulation could pave the way for companies like Amazon (AMZN), Facebook (FB), and Walmart (WMT) to enter the banking business. However, his views are in stark contrast to the FDIC’s (Federal Deposit Insurance Corp) stance, which has put the brakes on allowing companies to get into banking. FDIC insures customer deposits at traditional banks (XLF).

Easing standards for business loans

A Federal Reserve quarterly survey showed that in the third quarter, US banks eased standards for business loans, while terms for commercial real estate loans remained unchanged.

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