FOR IMMEDIATE RELEASE
Friday, Dec. 4, 2020
Contact: Pamela Russell at prussell@bettermarkets.com
WASHINGTON, D.C. — Better Markets today released a White Paper that details how key Federal Reserve actions since 2018 have significantly weakened banking protection rules, making the economy and financial system more vulnerable to another crash, endangering Main Street families and businesses.
Tim P. Clark, Distinguished Senior Banking Adviser at Better Markets and a former Deputy Director of Supervision and Regulation at the Federal Reserve Board, and Dennis M. Kelleher, President and Chief Executive Officer of Better Markets, authored the White Paper. Mr. Clark issued the following statement on the key findings:
“The Federal Reserve’s deregulation over the last few years has undermined the financial protection rules put in place to prevent another devastating financial crisis like that of 2007-2009. The lost jobs, homes, savings, retirements and dreams of tens of millions of Americans due to that crisis highlight the critical importance of having strong banking regulations and supervisory oversight. Both were woefully deficient pre-crisis, and both contributed to that disaster by allowing huge banks to be dangerously run and take on too much risk.
“That’s why the Dodd-Frank Act was passed and why the Federal Reserve worked so hard in the years after the crisis to enact it: to protect families, businesses, and communities as well as all taxpayers from again having to bail out an under-regulated and fragile financial system. Unfortunately, since 2018, the Federal Reserve and others have deregulated the banking sector, threatening its stability, safety, and soundness.
“The substantial deregulation of large U.S. banks and foreign banking organizations in the U.S. since 2018 has paved the way for a significantly less resilient banking system, rolling back the still-unfinished progress in critical areas that had been made since the global financial crisis. While the weakening of rules on its own has undermined the financial resiliency that was built up over a number of years, when this is combined with a change to more accommodating, bank-friendly supervisory oversight of large banks, the potential for damage is substantially amplified.
“Americans deserve better from financial regulators. This White Paper outlines key areas of large bank deregulation, pointing to steps that should be taken to restrengthen standards.”
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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.
