July 27 - Frank Keating, American Bankers Association president and CEO, has released the following statement regarding Glass-Steagall.
“While I have great respect for Sandy Weill, I’m dismayed by his comments supporting the breakup of our country’s largest banks. As I’ve said in the past, the banking industry strongly believes that no bank — or company — should be too big to fail. Moreover, these types of misguided proposals aren’t the solution and would damage our still-recovering economy. Reducing the size of our largest banks would severely diminish their capacity to serve America's largest businesses, driving corporations to foreign competitors that would quickly move to meet their financial needs. Financing would gravitate more heavily to the lightly regulated ‘shadow’ banking system and our country’s status as the world's premier financial center would be in grave peril.
“It’s time to push the pause button on flawed proposals that would damage the U.S. economy. Neither our financial system nor local communities are well-served by a rush to judgment on this issue. Those calling for a return to Glass-Steagall to solve the world’s economic problems simply aren’t looking at the facts. Glass-Steagall would not have prevented the financial crisis, which the GAO found was caused by exotic securities that fueled massive amounts of subprime mortgages. Policy decisions should be based on reason and facts, not hysteria and catchy sound bites.”