Sign In  |  Register  |  About Corte Madera  |  Contact Us

Corte Madera, CA
September 01, 2020 10:27am
7-Day Forecast | Traffic
  • Search Hotels in Corte Madera

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Warren says Yellen, Biden officials wrong on 'dangerous' bank mergers

Massachusetts Sen. Elizabeth Warren sent a letter warning Treasury Secretary Janet Yellen and other financial regulators against allowing further bank mergers.

Sen. Elizabeth Warren, D-Mass., sent a letter to key Biden administration officials slamming their openness to potential bank mergers as being "exactly the wrong approach" in the wake of the regional banking crisis.

Warren’s letter – sent to Treasury Secretary Janet Yellen, Federal Deposit Insurance Corporation Chairman Martin Gruenberg, Federal Reserve Vice Chair for Supervision Michael Barr, and others – noted that she has "long been concerned with bank concentration and your agencies’ failures to curb the proliferation of banks that are ‘too-big-to-fail.’"

"Since 2006, the Fed has approved more than 3,500 consecutive bank merger applications without denying a single one," Warren wrote. "In fact, less than two years before Silicon Valley Bank failed, the Fed approved its acquisition of Boston Private Bank and Trust following its determination – which we now know could not have been more wrong – that the merged bank would not ‘pose significant risk to the financial system in the event of financial distress.’"

FED EXPLORING WAYS TO SPEED UP BANK OVERSIGHT, STRENGTHEN STRESS TESTS

Warren argued that "consolidation hurts consumers" through higher prices and fees, lower deposit rates, less credit, bank branch closures and job cuts. She added that bank consolidation increases systemic risk in the financial system by "reducing the number of smaller banks and creating even more too big to fail banks."

The senator went on to tell the regulators, "Allowing additional bank consolidation would be a dereliction of your responsibilities, hurting American consumers and small businesses, betraying President Biden’s commitment to promoting competition in the economy, and threatening the stability of the financial system and the economy."

BANKING CRISIS CAUSED US BANK DEPOSITS TO FALL EVEN AS INSURED DEPOSITS ROSE: FDIC

She also requested that the letter’s recipients update their bank merger review guidelines and take steps that she believes would strengthen those standards, asking the regulators to respond to a series of questions by July 10.

Warren’s letter comes after Yellen said in an interview with The Wall Street Journal last week that while she doesn’t expect the banking sector to become as destabilized as it was earlier this year, weak earnings could prompt another round of bank consolidation.

FED, SEC PROBING GOLDMAN SACHS’ ROLE IN SVB’S FINAL DAYS

"I don’t think it’s a huge threat to the sector, but there will probably be banks that end up wanting to merge," Yellen told the Journal without specifying which banks may be more likely to pursue mergers. 

She added that financial regulators are wary of excessive consolidation and the risk it may pose to the financial sector, but that some mergers and consolidation could be healthy for the banking system.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

"We certainly don’t want overconcentration and we’re pro-competition, but that doesn’t mean no" mergers, Yellen told the Journal. "We have more banks, relatively speaking, in the United States than almost any country of which I’m aware."

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 CorteMadera.com & California Media Partners, LLC. All rights reserved.