Executives of the largest U.S. banks warn that efforts to make the financial system safer will harm their global competitiveness. They conjure a world in which foreign institutions, supported by government subsidies, dominate the business of providing banking services to multinational corporations.
A proposal by the Federal Reserve Bank of Dallas to limit government support for banks could force JPMorgan Chase & Co. and Bank of America Corp. to shrink their U.S. consumer and commercial-lending units by more than half.
The U.S. has historically kept the financial sector in check through a combination of sound principles and serendipitous decisions. But as the financial system gained strength in recent years, it also gained political influence. In the last decade, it has become too concentrated and too powerful, which has damaged not only the economy but the financial sector itself.
A Japanese program that will provide tax breaks to spur people to buy stocks may achieve the government’s targeted 25 trillion yen ($268 billion) in investments by 2020, a Fidelity Japan researcher said.
One of the great debates to emerge from the financial crisis is whether the U.S. Congress should resurrect some form of the Depression-era Glass-Steagall Act and bring back the separation of commercial and investment banking. It should, but not for the reasons usually cited.
The new financial regulation law gives the Federal Reserve chairman the authority to force banks to raise capital and tighten lending -- just as he’s trying to steer monetary policy in the opposite direction.
In November 2009, Senate Banking Committee Chairman Christopher Dodd advanced a radical proposal: to create a super-regulator that would take over most of the bank supervision that had been done by the Federal Reserve System, the Federal Deposit Insurance Corp. and other agencies.
The world’s largest banks need to shrink or be broken up in order to regain investors’ confidence after four years of scandals, high-profile trading losses and financial crises, according to a Bloomberg poll.