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Thursday, June 14, 2012

ABA Keating: Advocating Big-Bank Breakup 'Severely Misguided'

Breaking up the largest U.S. banks would be counterproductive for the recovering economy and would drive large corporations to foreign competitors and the largely unregulated “shadow” banking system, ABA President and CEO Frank Keating wrote in a letter to the editor published in yesterday's Weekly Standard magazine.

Keating emphasized that ABA has always believed that no bank should be too big to fail. But reducing the size of America’s largest financial institutions would severely diminish their capacity to finance the needs of the country’s largest businesses, and provide the intricate menu of financial services major firms often require, he said.
If the U.S. banking industry can’t meet their needs, there are a number of countries that are ready -- and willing –- to step up to the plate. ... Arbitrarily splitting banks into several smaller parts will just make serving businesses more difficult and drive up costs.
Read Keating's letter in the Weekly Standard.

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