News / USA

US Banks Wait, Watch for Financial Reform Impact

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The new financial reform legislation signed into law by U.S. President Barack Obama has the attention of executives at many of the country's biggest banks, worried about the potential impact the changes will have on their profits.

Many of the top banks have repaid the government for bailout loans given during the financial crisis, and are reporting profits.

On Wednesday, Wells Fargo bank reported more than $3 billion in profits for the three months ending in June.  Wells Fargo's second-quarter profits were lower than those it earned during the second quarter of last year, but bank officials said losses on bad loans to consumers and businesses have decreased.

Morgan Stanley on Wednesday reported nearly $2 billion in second-quarter profits due to strong trading results.  Other top U.S. banks have warned that investors have been less active, rattled by fears of a European debt crisis and volatility in the financial markets.

U.S. Bancorp also reported second-quarter profits, saying revenue jumped 63 percent compared to the same time last year.  U.S. Bancorp also said it increased its lending activity and that it expects fewer customers to default on their loans.

Following the financial crisis, many businesses and consumers were unable to get loans, hurting the country's economic production.

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