Bridge over ocean
1 May 1966 Financial Analysts Journal Volume 22, Issue 3

Senior Securities and Bank Stock Prices

  1. Warren A. Law

There is no doubt that investors are relatively disenchanted with bank stocks today. In view of the record, the only rational explanation is that many investors fear the future will not repeat the past, and bank earnings will not show the same relatively stable growth in the next decade. There are many reasons for such doubts — fear that banks cannot continue to increase their income to keep pace with increased interest paid on time deposits, that labor costs cannot be held in line, that we are headed for some vaguely defined financial crises, etc. Some of these doubts are, in my opinion, groundless. Others have more merit.

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