That boon underscores how the biggest banks roles as financial intermediaries can translate to billions of dollars of profits after borrowing floodgates open. When the firms start releasing their second quarter earnings on Tuesday, theyre broadly expected to post their worst results since the financial crisis as they set aside more money for bad loans. Gains from bond underwriting — and the resulting debt trading — are one of the few bright spots.
That fee income might be enough to turn quarterly net losses into profit for some banks, said Gerard Cassidy, an equity research analyst at RBC Capital Markets.
The Feds unprecedented actions in monetary policy since the start of Covid-19 have benefited banks very well, Cassidy said….
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