Shares of Bank of America Corp. (NYSE: BAC) posted a new 52-week low today at $5/share. BofA isn’t the only loser in the financial sector — JPMorgan Chase & Co. (NYSE: JPM), Goldman Sachs Group, Inc. (NYSE: GS), Morgan Stanley (NYSE: MS), and Wells Fargo & Co. (NYSE: WFC) are sharing in the pain.
One factor is the decision by the US Federal Reserve Bank to adopt the Basel III rules which require the banks to hold more of their capital in reserve. Another is the comment by the European Central Bank’s president that much uncertainty and substantial risk still remain in the economic outlook for the Eurozone.
The higher capital reserve requirements are hitting the big banks the hardest, as investors fear that increased reserves will weigh on profits. And the weakest of the banks, at the moment, is perceived to be BofA, so it is getting hit the hardest.
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