2016-04-12wsj.com

Bank stocks are having a terrible 2016, as central-bank policies, which for years lifted asset prices, are hurting the financial sector. The impact of economic stimulus efforts on lenders will get a fresh airing this week, as big U.S. banks begin reporting their earnings for the first quarter. Trading revenue is expected to have taken a hit, but the more enduring problem will be visible in the lenders' net interest margins, the basic measure of bank profitability that gets flattened by low interest rates.

The broader U.S. stock market has shaken off a steep slump at the beginning of the year and is back in positive territory. But banks and other financial companies are lagging far behind.

The divergence highlights the dilemma facing central banks. Easy-money policies have fueled a rally in risky assets. They are also squeezing profits at financial companies, inflicting pain on a sector that is fundamental to the health of the economy.



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