Bank/Thrift Supervision   |    Capital    |    CFPB    |    Deposit Insurance    |    Interchange    |    Mortgage Finance
Municipal Advisors   |    OCC-OTS Merger   |    Preemption    |    QM - QRM    |    Swaps   |    Volcker Rule    |    Full Topics List
Qualified Mortgage - Qualified Residential Mortgage
Consumer Financial Protection Bureau - CFPB
Bank/Thrift Holding Company Supervision
Deposit Insurance
Mortgage Finance
Municipal Advisors
OCC-OTS Merger
Volcker Rule
Corporate Governance
Financial Stability Oversight Council (FSOC)
Office of Financial Research (OFR)
Systemic Risk
Supervision and Oversight
Payment, Clearing and Settlement
Prudential Supervision
Trust & Securities
Asset-Backed Securities
Resolution Authority

Friday, July 27, 2012

Keating on Glass-Steagall: Look at the Facts

ABA President and CEO Frank Keating yesterday took issue with former Citigroup CEO Sandy Weill’s remarks supporting the breakup of the nation’s largest banks during Wednesday’s CNBC’s “Squawk Box” program. Keating expressed great respect for Weill, but said he was “dismayed” by those comments.
[T]he banking industry strongly believes that no bank -- or company -- should be too big to fail. Moreover, these types of misguided [breakup] proposals aren’t the solution and would damage our still-recovering economy.

Reducing the size of our largest banks would severely diminish their capacity to serve America's largest businesses, driving corporations to foreign competitors that would quickly move to meet their financial needs. Financing would gravitate more heavily to the lightly regulated ‘shadow’ banking system, and our country’s status as the world’s premier financial center would be in grave peril.
He added that it’s time to push the pause button on flawed proposals that would damage the U.S. economy.
Neither our financial system nor local communities are well-served by a rush to judgment on this issue. Those calling for a return to Glass-Steagall to solve the world’s economic problems simply aren’t looking at the facts.
He emphasized that Glass-Steagall would not have prevented the financial crisis, which the GAO found was caused by exotic securities that fueled massive amounts of subprime mortgages. “Policy decisions should be based on reason and facts, not hysteria and catchy sound bites,” Keating said.

No comments:

Post a Comment

Please read our comment policy before making a comment.