FOR IMMEDIATE RELEASE
Monday, December 20, 2021
Contact: Doug Walker at 202-618-6430 or dwalker@bettermarkets.org
WASHINGTON, D.C.— Today, Phillip Basil, Director of Banking Policy at Better Markets, issued the following statement on last Friday’s action by the Federal Reserve to approve three bank mergers:
“The Federal Reserve’s late-day approval announcements of three bank mergers last Friday—as Congress was leaving town and right before a holiday week—is a clear indication of the need for more transparency and public accountability of the bank mergers and acquisitions approvals process. Such actions only feed the cynicism of the American people and raise questions about who the Fed is really serving. The Fed should follow the lead of the FDIC and the Department of Justice in requesting feedback from the public on sensible reforms to the process and make the entire process much more transparent.
“Although the three mergers did not create any combined banks that would be classified as systemically important, a mergers and acquisitions approval process that continues to lack transparency, sufficient public input and scrutiny, and sensible guidelines will inevitably result in subsequent consolidation that harms consumers and small businesses and increases risk in the system. That is exactly what happened after the repeal of the Glass-Steagal Act, which resulted in 30 bank consolidations into just three gigantic too-big-to-fail megabanks that made the 2008 Financial Crisis much worse than it otherwise would have been. This is a pattern that does not need repeating.
“The policies at the banking agencies must be improved to ensure that even mergers and acquisitions of relatively smaller banks are in fact serving the public interest while reducing, or at least not increasing, the level of risk in the system. The Fed should be working in concert with the other banking regulatory agencies to meaningfully involve public input and put in place reforms that promote a safe and sound banking system that serves all Americans. Until the process is made much more open, transparent, and focused on the public interest, the agencies should halt bank mergers as we and others recently called for 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.
