Elizabeth Warren finds it ironic that Jamie Dimon and Lloyd Blankfein complain about regulation
President Trump has run on a platform of reducing regulations, including rolling back Dodd-Frank for the financial services industry.
CEOs like JP Morgan’s (JPM) Jamie Dimon and Goldman Sachs’ (GS) Lloyd Blankfein say regulation has gone too far, Senator Elizabeth Warren (D-Mass.) said she wholeheartedly disagrees.
“Right now, I guarantee you, we don’t have too much regulation,” Warren said. “Bank profitability, bank lending is at an all-time high. The banks are doing just great. And internationally they’re cleaning the clocks of the guys overseas.”
“So don’t tell me that regulation is a problem,” she added. “What the giant banks want is what they had back in the late 1990s and into the 2000s They want the chance to run wild, to write their own rules, to take the cop off the beat.”
She added she’s not surprised that’s what they’re after.
“They learned a big lesson in 2008,” Warren said. “They get all the profits on the upside, and if the whole thing crashes, the American taxpayer bails them out. And here’s the best part, the bank CEOs don’t even lose their jobs. That was the lesson of 2008.”
“Every time Jamie Dimon or Lloyd Blankfein or anyone else stands up and says, ‘Oh, too much regulation,’ I’m reminded that those are people whose banks were bailed out by the American taxpayers and they held onto their jobs; they still rake in a bazillion dollars,” Warren said. “And what do they want? They want to go back to the world where they crashed the economy the last time. They want a chance to do it again cause it worked out really well for them. It just didn’t work out so well for everyone else in this country.”
Glass-Steagall
Warren has also been a proponent of bringing back Glass-Steagall, the Depression era legislation that separated investment and commercial banking activities, which was repealed in 1999.
While there are mixed views on whether the legislation would have prevented the 2008 crisis, White House economic adviser and Goldman alum Gary Cohn is also on board with bringing it back.
Warren said bringing back the legislation is important for the competitiveness of smaller banks.
“Here in the United States, we say to our banks, ‘You get out there and compete … But think about what it’s like to be one of the smaller banks,” Warren said. “The smaller investment banks don’t get access to the cheap money in savings accounts and checking accounts. And the small banks don’t get to juice their profits with investment banking activities and risk taking.”
Glass-Steagall would bring more competition for the smaller institutions, Warren explained.
“One of the things that would be likely to happen if we had a good Glass-Steagall in place is you’d see more competition and a chance for some of the smaller and mid-sized financial institutions on both sides of the wall to get out there and compete against a handful of giants who’ve locked it up by being able to play both sides of the fence.”
Nicole Sinclair is markets correspondent at Yahoo Finance.
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