Press Release: Financial Trade Associations Comment on Banking Agencies’ Newly Issued Report on Banking Activities and Investments

FOR IMMEDIATE RELEASE: September 8, 2016

CONTACT: Laena Fallonlaena.fallon@financialservicesforum.org  (FSF)
Sean Oblack, sean.oblack@theclearinghouse.org (TCH)
Jeff Sigmund, jsigmund@aba.com (ABA)
Carol Danko cdanko@sifma.org (SIFMA)
Alison Hawkins, Alison.Hawkins@FSRoundtable.org (FSR)

WASHINGTON, D.C. – In response to the Federal Reserve, Federal Deposit Insurance Corporation,  and Office of the Comptroller of the Currency’s report on  banking activities and investments, The Clearing House, American Bankers Association, SIFMA, Financial Services Roundtable, and Financial Services Forum released the following joint statement:

“We oppose the recommendations announced today to repeal merchant banking and related authorities and believe they are unfortunate and ill-considered. For the last 15 years bank holding companies have successfully used the merchant banking authority granted to them by law to finance start-ups and growing companies, fueling jobs and economic growth.  And they have done so without any threat whatsoever to the safety and soundness of their affiliated banks or to the financial system at large. 

“The regulators have made these recommendations without pointing to any evidence that these activities have ever posed any problem, and have made no attempt to assess the costs to businesses and jobs.  They have not provided a cost-benefit analysis or a robust justification for such sweeping changes to laws which were heavily negotiated over a very long period of time and by several administrations.  While the regulators did not believe that the costs of regulation were worth considering here, we believe Congress should and will consider such costs.”

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