Financials Up as Fed Shows Leniency With Goldman, Morgan - Financials Roundup

Banks, lenders and other financial companies ticked up after the Federal Reserve allowed two major Wall Street banks to avoid some consequences of the failure of a key part of the recent "stress test." The clemency was seen as part of a new era of more lax bank regulation, following a decade of regulatory backlash against Wall Street. To pass the stress test, Goldman Sachs and Morgan Stanley would have had to cut planned payouts by $8 billion, but Fed regulators offered a workaround that resulted in a less drastic reduction of $3 billion. Vanguard Group said it will let clients trade rivals' funds on its platform for free, as it seeks to build its customer base further and expand wealth-management offerings. Accounting firm PricewaterhouseCoopers must pay $625.3 million in damages for failing to catch a fraud scheme that helped cause the failure of Alabama's Colonial Bank during the financial crisis, a federal judge ruled. A pair of lawsuits filed as part of China Fishery Group's sprawling chapter 11 case are seeking nearly $250 million in damages from the Asian arm of HSBC Holdings as well as the return of another $22 million transferred to the bank in the years leading up to the bankruptcy.

-Rob Curran, [e-mail]

(END) Dow Jones Newswires

July 02, 2018 16:58 ET (20:58 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.