Forum President & CEO Rob Nichols’ Statement on GAO Report Examining Funding Differential for Large Banks

The GAO report confirms what we have seen in many recent studies: any cost of funding differential large banks once had has been dramatically reduced if not eliminated or reversed. Any very small difference remaining is consistent with cost of funding differentials seen in larger businesses across all sectors of the economy. These differences have nothing to do with the expectation of a bailout, but are due to the fact that investors place great value in stability, diversification and liquidity. It is also critical to consider this issue in the context of the many new regulatory costs borne by the largest banks, including much higher capital and liquidity requirements.

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Commentary: Forum President And CEO Nichols Discusses How Financial System is More Safe, Sound Than Ever Before

Financial Services Forum President and CEO Rob Nichols recently appeared on CNBC’s “Squawk Box,” where he detailed the legislative, regulatory and industry changes that have occurred over the past five years to make our financial system safer and more secure.

Recent Work

31 July, 2014

Why a too-big-to-fail ‘subsidy’ won’t come back in a future crisis

The long awaited Government Accountability Office (GAO) report, requested by Senators Sherrod Brown (D-OH) and David Vitter (R-LA), confirms the findings of a number of recent studies on the decline in funding advantage for the largest U.S. banks. Using the most recent data, and a number of different methodologies on bank funding, the report shows that any advantage for America’s largest banks that is attributable to expectations of another bailout has declined to a minuscule amount or even been reversed. That fact, coupled with the costs of new regulation for the largest six institutions, means that being above $500 billion in assets is now, quite possibly, a competitive disadvantage.
31 July, 2014

Forum Statement on GAO Report

The GAO report confirms what we have seen in many recent studies: any cost of funding differential large banks once had has been dramatically reduced if not eliminated. Any very small difference remaining is consistent with cost of funding differentials seen in larger businesses across all sectors of the economy. These differences have nothing to do with the expectation of a bailout, but are due to the fact that investors place great value in stability, diversification and liquidity. It is also critical to consider this issue in the context of the many new regulatory costs borne by the largest banks, including much higher capital and liquidity requirements.
22 July, 2014

ForumBlog Responds to Bloomberg View: The U.S. Financial System is Far Stronger and More Resilient

In this week’s piece, Dodd Frank’s Four Years of Doing Nothing, Bloomberg View editors fail to mention material and important changes that have taken place in the financial system since the crisis that undercut the thesis of their column. To be fair, this was an opinion piece and opinions are one thing, but let’s review the facts on the changes that have taken place – initiated by the industry, regulators and Congress – to make today’s U.S. financial system safer, less complex and capable of providing capital to fuel the economy.
21 July, 2014

Forum Statement on Four-Year Anniversary of Dodd-Frank Act

“In the years since the financial crisis the industry, Congress, and regulators have implemented a wide range of significant improvements to ensure the strength and resilience of the financial system. Regulators have a host of new tools available, bank capital and liquidity levels have doubled, leverage has been substantially reduced, compensation practices have been aligned with long-term performance, and consumers have strong new protections. Today’s financial system is safer, less complex and more transparent to consumers and investors – and America is setting the global standard for financial system safety and soundness. The financial services industry remains committed to continuing to work to ensure the sector is strong, transparent, and able to provide necessary capital for working Americans without taxpayer dollars ever being put on the hook again.

U.S. Global Banks Have More Than Doubled Their Capital Ratio Since 2009

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