FOR IMMEDIATE RELEASE
March 11, 2020
Washington, D.C. – Dennis M. Kelleher, President and Chief Executive Officer of Better Markets, issued the following statement regarding President Trump’s meeting today with the CEOs of Wall Street’s biggest banks and their lobbyists trade groups:
“The first topic of discussion among the CEOs of Wall Street’s biggest, most dangerous banks and President Trump at today’s meeting should be ensuring the banks are financially strong enough to support the economy, survive the crisis and not need taxpayer bailouts. That starts with stopping all capital distributions via dividend payments, stock buybacks or otherwise. This is necessary because banks continued such capital distributions well into December of 2008, long after Lehman Brothers collapsed, and even after they were bailed out by taxpayers.
“The only thing standing between a failing bank and a taxpayer bailout is the amount of capital a bank has. Capital is the bank’s safety cushion that gets used to cover loses a bank incurs as a result of customer nonpayment, default and bankruptcy, which are likely to happen at very high levels as the coronavirus pandemic hits the U.S. If the bank does not have enough capital, then it will fail and go bankrupt, unless taxpayers bail it out as happened in 2008. To avoid that, banks need as much capital as possible and, therefore, must suspend all capital-depleting distributions until the coronavirus crisis is over.
“Consistent with their recent attempts to exploit the crisis and use it as a pretext for yet more deregulation, there are numerous reports that the Wall Street CEOs are going to ask for key financial protection rules to be weakened or, in their euphemism, ‘relaxed.’ With the country facing a demand-shock of unknown size, scope and impact from the coronavirus pandemic, the last thing any responsible official should do is weaken financial rules that keep the banks financially strong and protect Main Street taxpayers from having to bail out those banks again, as was done in 2008.”
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 www.bettermarkets.com.