Banks Take a Beating in the Markets

Receiving Wide Coverage ...

Buy low, sell high: If you're heavily invested in bank stocks, best to shut down your browser, step away from the computer and perhaps apply a cool compress to your forehead. It's ugly out there. Twenty of the world's biggest banks have lost a quarter of their combined market value since the beginning of the year, amounting to nearly half a trillion dollars, according to a Wall Street Journal analysis. Turns out the "bloodbath" isn't just about Brexit – China's economy, the Federal Reserve's decision to hold interest rates steady and cheap oil are also to blame.

Elsewhere, the Financial Times notes that while U.S. regional banks typically provide a "bright spot" in the industry, the KBW Regional Bank Index has fallen 6% since the British vote to leave the European Union, even though these banks have fewer direct ties to international markets. Analysts are predicting earnings will also be down, in part because the Fed is unlikely to raise rates any time soon.

Not over yet: British officials announced Wednesday they will seek a retrial of two Barclays bankers charged with manipulating Libor interest rates. Earlier this week a jury said it could not reach a decision about the former traders, Stylianos Contogoulas and Ryan Michael Reich, while three colleagues were convicted. New York Times, Financial Times

Wall Street Journal

Gathering intel: Banks are increasingly being asked to serve as "deputized watchmen for suspicious activity" to root out evidence of terrorist financing, money laundering and fraud for the government.

Tarullo sounds off: Fed Governor Daniel Tarullo said the central bank will continue to give the country's largest banks tough tests to ensure they meet capital and liquidity standards and can withstand another crisis. Speaking at a Wall Street Journal event on Wednesday, he also knocked a plan by Rep. Jeb Hensarling, chairman of the House banking panel, to unravel core portions of the Dodd-Frank Act.

In case you couldn't guess: Valdis Dombrovskis, the E.U.'s financial services chief, said the banking industry will be hit hardest by Brexit.

New York Times

No scapegoat: The Fed determined the economy was already looking dicey even before the Brexit announcement, according to minutes of the June Federal Open Market Committee meeting, released Wednesday. "Almost all participants judged that the surprisingly weak May employment report increased their uncertainty about the outlook for the labor market," according to the readout.

Piling on: Three more asset managers – Columbia Threadneedle Investments, Henderson Global Investors and Canada Life – have paused redemptions of British real estate funds. The funds are hoping to avoid a fire sale in the wake of concerns about the U.K. economy.

Elsewhere ...

Santeria, gators and balance sheets: There is nothing light about this investigation into the brutal murder of Maurice Spagnoletti, an executive of the now-defunct Doral Bank in Puerto Rico. But if you need a break from all the bad news elsewhere, it at least provides a change of pace. The story is chock-full of rumors about clandestine religious rituals, including one that possibly included an alligator-like creature called a caiman. Inside the bank!