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Wednesday, May 22, 2013

Lew: Bank Size ‘Not the Only Factor’ in Systemic Risk

Treasury Secretary Jacob Lew yesterday expressed concerns about the Brown-Vitter bill to raise capital requirements on the largest banks. Delivering the Financial Stability Oversight Council report to the Senate Banking Committee, Lew argued that regulators are currently working to address systemic risk from bank size through their powers under the Dodd-Frank Act.

“There are a number of regulatory approaches that would considerably raise the costs of being a large bank. I think we have to see where that process ends in order to answer the question of whether we have fully solved the [too-big-to-fail] problem,” Lew said in response to questioning by Sen. Sherrod Brown (D-Ohio).

Bank size is not the only criterion of systemic risk, Lew added. “Size is one factor, but it’s not the only factor.”

Read Lew’s testimony.

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