Most of the stories involving banks, tend to focus on the biggest 10 banks and their second quarter made $30 billion which is just short of what they made in 2007, the best year. The 10 biggest banks are back to making money the way they use to before the 2008 economic meltdown. In an article written by Yalman Onaran of Bloomberg News this money making machines has a problem, since 2010 the banks have been asking for less regulation (regulation both it submitting the paperwork and the ability to increase leverage or make more loans). The primary focus of any bank is to be paid back the loans it makes, the less the bank has to write off the more money it makes.

The 10 largest banks hold at least $100 billion in loans and now generate $57 million of profit for every working hour.

JP Morgan CEO Jamie Dimon suggests if the regulations were less the banks would have made more than $2 trillion in loans over the past 5 years. Mr. Dimon says small business are struggling to access capital markets. Although this is partly true, the other aspect is when there is seemingly trouble the first cuts to the limits bankers can lean go to small business.

Although are the 10 biggest banks are making more money, they are not as profitable as they were. Return of assets is about 35% below than 2007; Return on equity is about half of what it was. Higher capital requirements lowers the return on capital even if the assets earn the same margin.

Linking to dividend paying stocks, it is great the 10 biggest banks are making money for the banks then can continue to provide the credit which drives the economy. As an investor, you want your investments to do well, however the long term nature of the holding wants consistency. The regulations help maintain the consistency because the banks have to remember the cardinal rule of being a banker, get paid back with interest. Regulations can help stabilize industries; keep competitors out of the market; and allow for continuing profits to be made. Sometimes as an investor you want good regulations in place which are enforced.

There are more questions than answers, till the next time – to raising questions.