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Friday, April 13, 2012

ABA Keating: Dismantle ‘Too Big to Fail,’ Not Large Banks

The banking industry believes no bank should be too big to fail. But the Dallas Federal Reserve Bank’s misguided proposal to dismantle the largest U.S. financial institutions is not the solution, and it would be detrimental to the still-recovering economy, ABA President and CEO Frank Keating said yesterday in a Wall Street Journal letter to the editor.
Only five of the [world’s] top 50 banks … are located in the U.S. Reducing their size would severely diminish their capacity to serve America's largest businesses. … European and Asian banks [would] quickly move to meet our corporations’ banking needs,” putting the U.S.’s status as the premier world financial center in peril.

The top 10 U.S. banks today employ 1.1 million people, routinely deliver innovations that make managing money safer and more convenient and provide critical services to U.S.-based multinational companies that in turn employ millions. How can dismantling them be better for us than stating, unequivocally, that Uncle Sam won’t rescue those that fail?

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