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Over the last five trading days, performance of banking stocks remained bearish. Subdued trading revenue outlooks from Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) again drew investors’ attention to persistent pressure on top line. Also, concerns related to additional capital cushion persist.

Further, increased legal costs continue to haunt large banks and will drag down their profits in the subsequent quarters. The law-enforcement agencies, with an aim to avoid lengthy litigations, are also trying to resolve such issues.

The delay in the long awaited merger deal between M&T Bank Corp. (MTB) and Hudson City Bancorp, Inc. raises further disappointment. The closing date of the proposed merger has again been extended to Apr 30, 2015 from the prior deadline of Dec 31, 2014. This is the third time that these two banking entities have agreed to extend the deadline.

(Read last to last week’s developments here: Bank Stock Roundup for Dec 5, 2014)

Recap of the Week’s Most Important Developments:

1. If the Federal Reserve has its way, big American banks will have to meet an additional capital requirement beyond the minimum international standards. The banking regulator is contemplating the levying of additional capital surcharge on the U.S. Globally Systematically Important Banks (GSIBs).

Currently, 8 U.S. banks are categorized as GSIBs, namely, BofA, The Bank of New York Mellon Corp. (BK), Citigroup, The Goldman Sachs Group, Inc., JPMorgan, Morgan Stanley, State Street Corp. (STT) and Wells Fargo & Co. (WFC).

The estimated capital surcharge under the proposal will range between 1.0 – 4.5% of the GSIB’s total risk-weighted assets (RWAs).The international rule calls for surcharge between 1.0 – 3.5% for GSIBs.

At present, almost all banks are required to meet the common equity capital requirement of 7% of RWAs. The latest surcharge will come over and above this requirement. Therefore, if the proposal is implemented, the highest capital requirement for GSIBs will amount to 11.5% of RWAs. (Read More: Banks May Face Additional Capital Surcharge: Time to Shrink?)

2. At an investor conference sponsored by Goldman Sachs in New York, BofA provided a weak forecast for trading revenues in the final quarter of this year. This fueled the market observation that major banks have been moving away from the previous money-making business of trading stocks, bonds, commodities and derivatives.

BofA expects sales & trading revenues in the fourth quarter to fall below the prior-quarter as well as the year-ago quarter figure. (Read More: Why BofA Offers Lower Trading Revenues Outlook for Q4).

3. Considering the ongoing regulatory inquiries and investigations, Citigroup announced expected legal and related costs of about $2.7 billion, which will be recorded in the fourth-quarter 2014 results. This will impact the bank’s profits. Moreover, repositioning costs of about $800 million are anticipated in the quarter. Notably, after giving effect to such costs, marginal profit is expected in the fourth quarter. (Read More: Citigroup Q4 Results to Record $2.7B Legal Charges).

4. A day after it was disclosed that JPMorgan will have to increase its capital levels by nearly $22 billion owing to the additional capital surcharge proposed by the Federal Reserve; Marianne Lake, the chief financial officer (CFO) of the company, expressed hopes to meet the requirement with minimal operational changes.