This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Bank of America: Financial Winner

Stocks in this article: BAC I:BKX

NEW YORK ( TheStreet) -- Bank of America (BAC), was the winner among major U.S. financial names on Tuesday, with shares rising 2% to close at $13.52.

The broad indexes all advanced, after Alcoa (AA) late on Monday kicked off earnings season by reporting a smaller-than-expected second-quarter loss. Alcoa reported a net loss of 11 cents a share, but excluding restructuring costs, the aluminum producer earned 7 cents a share, beating by a penny the consensus estimate among analysts polled by Thomson Reuters.

More importantly, Alcoa reiterated its projections of a 7% increase in global aluminum demand during 2013. During the firm's conference call, CEO Klaus Kleinfeld said Alcoa's "projection of an 11% demand growth for aluminum in China is really confirmed."

Despite a proposal from federal regulators to double the minimum Basel III Tier 1 leverage capital requirement for the nation's largest banks, the KBW Bank Index (I:BKX) rose 0.5% to close at 64.58, hitting its highest close since October 2008.

The regulators proposal came just one week after the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency issued their final rules for the implementation of Basel III capital standards.

Coverage of the Basel III implementation has focused on the Tier 1 common equity ratio, which is a risk-based capital ratio, meaning that a banks' assets are ranked to require additional capital to support risker loans and investments.

After numerous calls in Washington for simpler capital rules, the three regulators on Tuesday proposed that all U.S. banks with total assets of over $700 million maintain supplementary Tier 1 leverage ratios of at least 6%.

The Tier 1 leverage ratio is not risk-weighted. Under Basel III, banks are required to maintain 4% Tier 1 leverage ratios, but the largest banks also required to perform a separate supplementary leverage ratio calculation that factors-in off-balance-sheet items. The minimum supplementary Tier 1 leverage ratio for banks required to use this "advanced approach," is 3% under Basel III.

So one could argue that the new proposal is putting U.S. banks at a distinct disadvantage to foreign competitors.

Under the U.S. regulators' new proposal, the largest banks themselves will have to raise their core capital to 6% of average total assets, factoring in off-balance-sheet items, while their holding companies will have to maintain minimum supplementary Tier 1 leverage ratios of 5%.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,796.09 +17.94 0.10%
S&P 500 2,064.50 +3.27 0.16%
NASDAQ 4,748.9970 +0.6010 0.01%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs