On July 27, banking regulators proposed new, long overdue, capital requirements for the largest banks. Bank capital is critical to protect Main Street families, jobs, small businesses, community banks, the financial system, and the economy. But Wall Street and its supporters have made false, baseless, and dangerous arguments about capital to protect their bottom line. That’s why we’re telling the real story of the importance of bank capital, the need for regulators to strengthen capital requirements, and standing up to Wall Street’s lies on the critical issue.
Key Recent Better Markets Materials
Dennis Kelleher Op-ed in American Banker: Well-capitalized banks are good for everyone, except Wall Street CEOs (8/9/23)
Statement on Fed and FDIC’s Changes to Capital Requirements (7/26/23)
Fact Sheet outlining Ten False Claims About Capital (7/25/23)
Statement on Fed Vice Chair Barr’s Speech on Increasing Capital Requirements (7/10/23)
Letter Asking Fed Chair Powell to Not Let Congress & Wall Street Interfere with Vice Chair Barr’s Holistic Capital Review (3/6/23)
Report on the Importance of Capital Requirements in Protecting our Financial System and Main Street (12/22/22)
Capital in the News
Reuters: US banking industry starts to pick its battles against new capital rules (8/7/23)
Dennis Kelleher, head of the financial reform advocacy group Better Markets, said the banking industry had made similar complaints in the past which he believed had proven unfounded.
“Wall Street is expert at hiding their special interests behind the concerns of others, which they inflame with scare tactics and false claims,” he said.
“What they don’t talk about is the threat to the economy and lending and main street and families and contagion from under-capitalized banks.”
Reuters: US regulators to unveil plan for banks to build cash reserves (7/26/23)
U.S. regulators are set to propose a rule that could significantly raise capital requirements for larger banks, forcing them to cut costs and retain earnings in an effort to cushion against potential losses that could harm customers and investors. …
“Bank capital is critical,” said Dennis Kelleher, president and CEO of Better Markets, which advocates for tougher financial rules. “However, maximizing Wall Street’s bonuses depends on minimizing capital and that’s why Wall Street fights to prevent regulators from requiring them to have enough capital.”
MarketWatch: FDIC approves proposed capital requirements for U.S. banks (7/27/23)
Dennis Kelleher, chief executive of Better Markets, said bank claims about the rules restricting capital flow are essentially false.
“Maximizing Wall Street’s bonuses depends on minimizing capital and that’s why Wall Street fights to prevent regulators from requiring them to have enough capital,” Kelleher said in a prepared statement. “Of course, Wall Street’s banks can’t admit that, so they hide behind a smokescreen of false, baseless, and dangerous arguments against capital that do not withstand scrutiny.”
Politico Morning Money (7/26/23)
Watchdogs challenge banker script on capital — Better Markets is out with a new fact sheet in which it tries to rebut bank executive and lobbyist arguments against forcing banks to tap more capital, describing the talking points as “a smokescreen to conceal their self-interest in keeping the amount of capital as low as possible to keep their bonuses as high as possible.” “There is no evidence banks have ever been overcapitalized and there has never been a banking or financial crash caused by banks that had too much capital,” the group said.
New York Times; The Fed’s Vice Chair for Supervision Suggests Big-Bank Regulation Changes (7/11/23)
Still, “we’re not going to know how significant these changes are until the lengthy rule-making process plays out over the next couple of years,” said Dennis Kelleher, the chief executive of the nonprofit Better Markets.
Mr. Kelleher said that in general Mr. Barr’s ideas seemed good, but added that he was troubled by what he saw as a lack of urgency among regulators.
“When it comes to bailing out the banks, they act with urgency and decisiveness,” he said, “but when it comes to regulating the banks enough to prevent crashes, they’re slow and they take years.”
CNN: Banks with at least $100 billion in assets could face higher capital limits (7/11/23)
Federal Reserve Vice Chair for Supervision Michael Barr said Monday he is proposing stricter bank capital requirements in light of three major US bank failures earlier this year. …
Meanwhile Dennis Kelleher, CEO of Wall Street reform group Better Markets, applauded the proposals, saying they “promote bank stability, lending, and economic growth, not constrain it.”
“When large banks have too little capital, Main Street families, small businesses, community banks and the entire economy pay the price,” he said in a statement shared with CNN.
