By Dick Bove
Since the financial crisis, amid outrage at the likes of Citigroup and JPMorganChase and Washington’s rejiggering of the financial system, the banking industry has had one major defender: Richard X. Bove. Now he explains why big banks are the nation’s lifeline to success, and why financial disaster will ensue if we make it impossible for them to fill their role in the economy.
Bove argues that big banks are necessary to ensure America’s position in global finance; to assist corporations in achieving their goals against foreign competition; and, most importantly, to defend the average household’s access to financial services.
Limiting the major banks, he shows, is an attack on our future growth. Bove offers ways to improve the economy’s stability, including allowing some banks to be 'too big to fail' and lessening the demand on liquidity so they won’t need to sell existing loans. His main argument, that we need to stop fighting our greatest guardians of prosperity, is sure to be controversial.
About the author
Richard Bove has been a fixture in the securities industry since 1965. He is currently vice president of equity research at Rafferty Capital, where he analyzes the banking and brokerage industries.