Downsizing would impede U.S. banks’ ability to serve the country’s largest businesses and would lead companies to use foreign banks instead, said Frank Keating, president and chief executive officer of the American Bankers Association.
'It’s time to push the pause button on flawed proposals that would damage the U.S. economy', Keating said in a statement Friday.
Keating and others commented after Weill, the former Citigroup Inc. (C) CEO who helped champion the repeal of the Depression-era law that split deposit-taking from investment banking, said in a July 25 CNBC television interview that he now believes the separation should be reinstated.
'A big-bank bust-up on these simple, if alluring, criteria will do nothing to make banking safer', Karen Shaw Petrou, a managing partner and co-founder of Federal Financial Analytics Inc., said Friday in a memo to clients of the Washington-based firm. Clearer rules for regulators and bankers are needed instead, she said.
Bloomberg reports that The Clearing House, a New York-based association of large commercial banks, released a report saying that for the last 20 years, bank assets have grown on the same scale as companies in the Standard & Poor’s 500 Index and U.S. exports.
'Large banks offer several unique contributions to the U.S. economy', the Clearing House said in the report. 'These contributions include unique products and services, economies of scale and spread of innovation'.
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