WASHINGTON, D.C.— Dennis M. Kelleher, Cofounder, President and CEO, issued the following statement in connection with today’s release of Better Markets’ Banking Enforcement Report. The report is released ahead of a House Financial Services Committee and Senate Banking Committee oversight hearings with witnesses that include top regulators from the Federal Reserve, FDIC, and OCC.
“The spectacular failures of 14th and 16th largest banks in the U.S. as well as the ongoing banking crisis have galvanized attention on the risks and dangers posed by large U.S. banks. The Report we are releasing today shows that even before the latest failures and even before the Trump administration’s deregulation, the Fed and the other banking agencies repeatedly failed to effectively enforce the rules and laws against large banks and even the largest Wall Street banks.
“When banks and bankers are not appropriate punishment for breaking laws or failing to comply with financial safety rules, they are not deterred from engaging in illegal and unsafe behavior. That is particularly dangerous with banks because they then take on more risks, engage in more reckless activities, and create more dangers that heighten the threats they can pose to the economy, the financial system, and the wellbeing of the American people. This is exactly the type of behavior that led to the current banking crisis.
“The dangers posed by these banks remain too great a threat to financial stability as well as the prosperity and livelihoods of the American people. In a period of economic and financial turmoil, when these banks are most likely to be struggling, the government will not allow them to fail and they will be supported by taxpayer-funded bailouts. At the same time, their long history of dangerously poor management, as well as unethical and even illegal behavior, makes clear that large banks will not operate safely and in compliance with rules and laws unless forced to through strong oversight by the Fed and the other banking agencies.
“In our Report we explain that it is past time that egregious bank conduct be counterbalanced by a particularly strong regulatory regime and an assertive banking supervision approach that regularly uses stronger enforcement actions by the banking agencies that oversee large banks. Only then will banks and bankers be properly incentivized to prioritize safety, soundness and financial stability, which protects Main Street families, workers, small businesses, community banks, our financial system, and the entire economy.”
You can find the Report here.
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Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
