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Quarter-End Insights

Financial Services: Our Take on U.S. Tax Reform and Bank Deregulation

Tax reform may still happen even as banking deregulation in the U.S. faces more hurdles.

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  • The financial-services sector is slightly overvalued, trading at a 2% premium to our fair value estimates.
  • Banking deregulation in the U.S. still faces an uphill battle, but smaller banks would reap the majority of any benefit.
  • In our view, U.S. tax reform is still more likely than not, but if it does not get through before midterm elections, the chances decrease.
  • Singapore banks are recovering from oil- and gas-related losses, the real estate market is not likely to slow down in Hong Kong, and bank levies increase the burden on Australian banks.

Stephen Ellis does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.