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Too-Big-To-Fail
Megabanks Deny Taxpayer Subsidy
Trade
associations representing the nation’s largest financial institutions released a policy brief denying they benefit from taxpayer-funded subsidies.
The Financial Services Forum, Financial Services Roundtable, Clearing House, Securities Industry and Financial Markets Association and American Bankers Association said they question the methodology of a study that found that megabanks enjoy an $83 billion subsidy.
The brief said the funding advantage for the largest financial firms has decreased since the passage of the Dodd-Frank Act, citing provisions implementing regulatory authorities for enhanced prudential supervision and orderly liquidation of large banks. The reforms followed trillions of dollars in taxpayer support following the 2008-10 Wall Street financial crisis.
ICBA
strongly supports policies to address the problem of too-big-to-fail and to rein in large banks and financial firms to level the playing field with community banks. The association recently noted that U.S. Attorney General Eric Holder’s testimony that the size of too-big-to-fail financial firms inhibits Justice Department prosecutions on Wall Street demonstrates that they enjoy favorable treatment.
“Not
only have these institutions received billions of dollars in taxpayer support because of the systemic risks they pose, they are also apparently immune from criminal prosecution,” ICBA President and CEO Cam Fine said. “Meanwhile, community banks have been left to pick up the pieces under the weight of crushing laws and regulations enacted to halt Wall Street’s unscrupulous behavior.”
Too-Big-To-Fail
Fine: Wall Street in Denial
The
megabanks’ policy brief denying that they benefit from taxpayer-funded subsidies is the latest sign that Wall Street is in denial about its too-big-to-fail problem, ICBA President and CEO Cam Fine wrote in a blog post. The massive financial firms and their associations say that the Dodd-Frank Act that they vilified has solved the problem, neglecting to mention that the five largest banks have grown by nearly 20 percent since the beginning of the financial crisis in 2007, he wrote.
“The
megabanks also cite a separate International Monetary Fund report that found that their funding advantage amounts to ‘only’ 20 basis points,” Fine wrote. “Of course, community bankers know that 20 basis points can make or break the bank on Main Street. But to Wall Street firms used to periodic taxpayer bailouts, that’s chump change.” Read Finer Points.
Too-Big-To-Fail
ICBA Stands with Sens. Brown, Vitter Against Wall Street Spin
In
related news, ICBA President and CEO Cam Fine expressed support for a news release from Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.) challenging the megabanks’ claims regarding their too-big-to-fail subsidy. Despite the claims made by the megabanks’ paid cheerleaders, too-big-to fail is alive and well, Fine said.
“ICBA
thanks Sens. Brown and Vitter for their unwavering support of Main Street and their ability to see through the smoke that the Wall Street spin machine is creating as a desperate move to protect the nation’s megabanks—the same group that caused, and nearly brought down, our entire financial system during the greatest financial crisis since the Great Depression,” Fine said. Read ICBA Statement.
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Too-Big-To-Fail
ICBA’s Fine: ‘Too Big to Fail’ a Myth? What a Relief
ICBA President and CEO Cam Fine wrote that an American Banker editorial claiming that the too-big-to-fail problem is a myth—is great news.
In his own editorial on the American Banker website, Fine wrote that the end of too-big-to-fail means greater market discipline in the financial system and allows for normalized monetary policy after years of accommodations for megabanks.
“While
I and other community bankers distinctly remember that the Wall Street financial crisis of 2008 caused the past five years of economic turmoil and trillions of dollars in government assistance, it was a great pleasure to learn that no significant restructuring of the firms that caused the meltdown is needed whatsoever,” Fine wrote.
Meanwhile, the end of the problem would allow for Justice Department prosecutions of banks believed to be too big to jail. “So on second thought, Wall Street, the end of ‘too big to fail’ might be one secret you should keep to yourselves,” Fine wrote. Read Fine’s Op-Ed.
Convention
ICBA National Convention and Techworld Underway in Las Vegas
More than 3,300 community bankers and industry leaders gathered for the opening of the 2013 ICBA National Convention and Techworld at the Wynn Las Vegas and Encore. The convention, which runs through Friday, is the largest gathering of community bankers in the world and features an all-star lineup of speakers, more than 60 educational workshops and numerous networking opportunities.
“This
ICBA event is always a tremendous forum for community bankers and industry leaders to exchange ideas, discover the latest trends and learn about new developments,” ICBA Chairman Jeff Gerhart said. “Most of all, it’s the perfect time for community bankers to come together and discover even more ways to empower their local towns and cities across the nation.”
Highlights of the convention include remarks from national newsmakers, including Consumer Financial Protection Bureau Director Richard Cordray, Comptroller of the Currency Thomas Curry, FDIC Chairman Martin Gruenberg, legendary NFL quarterback Joe Montana, Fox News Sunday host Chris Wallace and Wikipedia founder Jimmy Wales.
Stay tuned to up-to-the-minute information via ICBA’s convention website,
the ICBA 2013 Mobile App and by following the #ICBALV13 hashtag on Twitter. Read ICBA Release.
Convention
Community Bankers Build for Habitat for Humanity Las Vegas
ICBA made a donation to Habitat for Humanity Las Vegas during an annual build as part of the 2013 ICBA National Convention and Techworld in Las Vegas.
The
project will eventually house six deserving families, with an estimated completion date of November 2013. All of the Habitat for Humanity homes will be Energy Star and WaterSmart certified.
"Community banks build and reinvest in their communities everyday by lending to local small businesses and residents who call that place home,” incoming ICBA Chairman Bill Loving said. “Community bankers aren’t shying away from that same spirit of giving as they travel to Las Vegas during ICBA’s National Convention and Techworld.” Read ICBA Release.
Convention
ICBA and Travelers Celebrate 30 Years
ICBA recognized the 30th anniversary of its strategic relationship with Travelers during the 2013 ICBA National Convention and Techworld. An ICBA Preferred Service Provider since 1983, Travelers has brought unique value to ICBA-member community banks with its complete line of insurance products offered through the Travelers SelectOne ICBA insurance program.
Earlier this year, Travelers announced that eligible ICBA member banks will share in a $3.36 million dividend resulting from the 2011 program year. During the 30-year relationship between ICBA and Travelers, member banks have shared more than $40 million in policyholder dividends. Read ICBA Release.
Learn More.
Convention
ICBA and Kanaly Trust Announce Strategic Partnership
ICBA announced a new strategic partnership with Kanaly Trust to provide community banks with a unique option to maximize their existing trust and wealth management assets. Kanaly Trust is a wealth-management firm with more than $2 billion in assets under management. The company also provides trust/estate services to families, individuals and estates. Read
ICBA Release.
Poll
This Week’s Quick Poll
Take this week’s Quick Poll
on too-big-to-jail, and view results from the previous poll on community bank advocacy. View the Archive.
Education
ICBA’s BSA/AML Institute Slated for May
An upcoming ICBA seminar is designed to provide attendees with a greater understanding of how to adopt improved Bank Secrecy Act/Anti-Money Laundering practices, establish stronger internal controls, and monitor for weaknesses. The BSA/AML Institute,
scheduled for May 13-15 in Minneapolis, will utilize real-world examples for banks of varied asset sizes. Using this approach, attendees can closely consider their situation relative to a peer example and put more substance behind catchphrases such as “risk-based” and “as needed.” Register Online.
Products and Services
Read the March Issue of BankInsurance.com News
In
the March issue of BankInsurance.com News from Michael White Associates, a parade of bank earnings reports reveals this spring’s “Lions and Lambs.” Plus, find out how, despite gains in insurance fee income at many community banks, overseas losses dragged overall U.S. bank insurance brokerage fee income lower. Also in this issue, what are the Gold Monitor Awards, who are the winners and, most importantly, what can your bank learn from them? Read More.
Products and Services
Best Practices for Building an Enterprise-Wide Electronic Channel Strategy
As many community banks add mobile banking to their repertoire of e-banking services, a lack of direction for regulatory compliance initiatives, challenges to mitigating the risk of potential transaction loss and controlling administration costs top the lists of concerns for community bank technology and information security management teams. Successful deployment and ongoing mobile banking management requires a paradigm shift in strategy—an enterprise-wide electronic channel strategy. Read More.
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