It has been a case of short-term pain, long-term gain for shareholders in US banks. The largest Wall Street firms recorded multibillion-dollar charges in their fourth-quarter 2017 earnings, caused by the country’s new tax code that was signed into law late last year.
Going forward, the biggest US tax overhaul in three decades will prove a coup for the country’s lenders. By slashing the corporate rate from 35% to 21% it will cut their annual tax bill and boost US business activity. But those benefits will only materialise from the start of 2018, when the law took effect.
