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December 22, 2022

Report: Policymakers Must Protect the Economy by Strengthening the U.S. Banking System Through Higher Capital Requirements

WASHINGTON, D.C.— Dennis M. Kelleher, Cofounder, President and CEO, issued the following statement in connection with today’s release of Better Markets’ report on Protecting Our Economy by Strengthening the U.S. Banking System Through Higher Capital Requirements.

Our economy depends on a vibrant banking system that can support America’s families and businesses in good times and bad – that requires banks to have an adequate capital cushion to absorb their losses during times of stress without failing, causing contagion, or precipitating a financial crash.  Unfortunately, the largest banks in the U.S. today have woefully insufficient capital and that undermines the stability of the financial system, which increases the possibility of future banking crises and bailouts.

“The report we are releasing today shows that regulatory reforms put in place after the 2008 Crash by the banking regulatory agencies have failed to eliminate the features of the largest Wall Street banks that make them too-big-to-fail. Capital standards that are too low are one of those principal features and they must be increased if banks are going to be strong enough to provide the benefits to society that come from a resilient banking system.

“For too long a key focus of the debate around bank capital has been on the costs to the industry, while the incalculable benefits of protecting taxpayers and hardworking Americans from the kind of ruinous impact that resulted from the 2008 Crash are too often downplayed or ignored. That has been the case even though there is no conclusive evidence to support the same old arguments that the industry and its allies have been repeating for years, if not decades. For example, the increased capital requirements that were put in place after the 2008 Crash have not reduced the share of lending made by banks, even though banks and their lobbyists vociferously claimed that is what would happen.

“The basis for higher capital requirements is simple and obvious: better capitalized banks create a stronger, more resilient, and stable financial system, and they better support the economy in good times and bad. After all, capital is simply another source of funding banks can use to make loans and other investments, but it has the advantage of also being able absorb losses in times of stress. When large banks are undercapitalized, not only are downturns more likely, but they are also more likely to become severe financial and economic crises that can cause catastrophic harm to America’s families and lead to taxpayer-funded bailouts.

“When the regulatory agencies modify the capital framework, they must keep in mind that the ultimate goal for large banks is to promote economic strength while at the same time protecting the system from the dangers giant banks can pose. Stronger capital requirements would do both. This is the best way to promote a resilient and robust U.S. banking system that will continue to be a leader and serve the American economy and the American people in the future.”

You can find the report here and our accompanying fact sheet here.


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


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