Forced Bank-Rating Downgrades

I mentioned in a previous blog the Dodd-Frank Act of 2010, which was supposed to make banks stronger, among its other panacea provisions, and the banking credit-rating downgrades despite the legislation.

There is yet another way to measure the fact that big banks are not deemed as secure by investors as they were before the Dodd-Frank Act. Look at the cost of insuring bank debt.

The cost of insuring $10 million of debt for five years is an excellent indicator that’s available with regard to the credit standing of major banks. And it’s been high, at least as an investors’ perception of that risk. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter