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July 25, 2023

Fact Sheet: Wall Street’s Claims Against Capital Are False, Baseless, and Dangerous

WASHINGTON, D.C.— Dennis Kelleher, Co-founder, President, and CEO, issued the following statement in connection with the release of a Fact Sheet outlining Wall Street’s “Ten False Claims About Capital” ahead of the Federal Reserve (Fed) and the Federal Deposit Insurance Corporation (FDIC) meetings on Thursday, July 27, when they are expected to propose capital requirements.

“Bank capital is critical to protect Main Street families, jobs, small businesses, community banks, the financial system, and the economy. That’s because capital is what large banks use to absorb their own losses and avoid taxpayer bailouts.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. 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. That’s why Better Markets is detailing how ten of their most common claims are in fact false, baseless, and dangerous.”

The following 10 false, baseless, and dangerous claims are addressed in detail in the fact sheet:

  1. Higher capital requirements will increase the cost of credit, cause banks to reduce lending, hurt the economy and Main Street families.
  2. The only way to implement changes to capital requirements is through the years-long rulemaking process.
  3. Capital standards have been increased from 2008 levels and are therefore adequate.
  4. Large banks were a source of strength during the COVID-19 pandemic which proved they do not need to have stronger capital standards.
  5. If bank capital requirements are increased, financial activity will shift from banks to the unregulated “shadow banks,” which Jamie Dimon claims will be “dancing in the streets.”
  6. Banks’ analysis allegedly support their arguments against stronger capital requirements.
  7. It is unfair for U.S. bank capital standards to be higher than standards for foreign banks.
  8. The stress tests as currently designed are sufficient for assessing capital needs for the banking industry.
  9. Banks with less than $250 billion in total assets are not systemic and do not need to be subject to higher capital levels.
  10. The recently proposed “reverse stress tests” will improve the stress testing process.


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis 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

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