While an Obama victory would mean status quo on financial regulation, which is mostly priced into stocks, A Romney win would be a positive catalyst for bank stocks as the regulatory regime under Republicans could be more friendy, Joe Morford and Gerard Cassidy write.
Governor Romney has pledged to repeal the Dodd-Frank Bill and Republicans may look at scaling back the authority of the Consumer Financial Protection Bureau. A more favorable tone in Washington could ease litigation risks related to mortgage practices as well."In our view, Bank of America and Citigroup are the ones that could benefit the most from a Romney win," the report said. "As two of the largest banks in the country, Bank of America and Citigroup have been among the more vilified companies by the press and politicians over the past several years. Meanwhile, since they are both major players across many different financial services businesses, they should be among the greater beneficiaries of any scaling back of the Dodd-Frank regulations and reforms." -- Written by Shanthi Bharatwaj in New York.
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