The Bank of England delivered a shocker to the market Thursday morning, and potentially a little bit of good news to banks.
The decision by the central bank to cut interest rates from 0.5 percent to 0.25 percent might mean investors' margins get crimped. But the British central bank's renewed commitment to buying bonds could help banks around the world. For investment banks, in particular, it may lead to a flood in new revenue, since the BOE's rate-cut and bond buying decision may well spur more revenue on Wall Street and for U.K. and European Union banks.
"Rate cuts and other stimulus measures will allow hard-hit companies to boost buybacks and take other measures to regain their footing and buoy their share price," said lawyer Steve Wolosky, who represents activist investors for Olshan Frome Woloksy. "We would expect this type of activity to attract investors of all types, including activist investors."
Having worn a path to many companies' doors to demand buybacks and dividends in the U.S., activist investors taking on new targets on the other side of the Atlantic would potentially mean more revenue to Wall Street banks, if they can succeed yet again in forcing dividends, buybacks and M&A.