President Donald Trump is considering breaking up the nation’s biggest banks, a vow he had made during the presidential campaign then seemed to put on the back burner.
In an interview Monday with Bloomberg News, Trump said he is “looking at that right now.”
Major averages slipped as the news broke, then rebounded, while government bond yields hit their highs of the day.
Bank stocks rallied, with investors taking a win-win view: Breaking up the big banks would open business opportunities for smaller institutions, while the large Wall Street firms would be worth more as separate entities than they are combined.
“The theory has always been the sum of the parts is worth considerably more than the whole,” said analyst Dick Bove, vice president for equity research at Rafferty Capital Markets. “You might find a lot of investors who say that (if) they’re going to break up these banks, they’re more [valuable] in pieces than they are together, I’m going to buy them.”
Tuesday, May 02, 2017
Trump Says He’s Actively Considering Breaking Up Big Banks, Reinstating Glass Steagall