Banks Should Get Down on Their Knees and Pray for Regulation

ezgif.com-resize (73)Everyone’s talking about this Wall Street Journal article that covers the regulatory flood. The banks brought it on themselves because of their actions before and after the Great Financial Crisis. And now they’ve got to live in the world they’ve created…

The 2010 Dodd-Frank law … is one of the most complex pieces of legislation ever. At more than 22,200 pages of rules, it is equivalent to roughly 15 copies of “War and Peace”…

The six largest U.S. banks by assets in 2013 together spent at least $70.2 billion that year on regulatory compliance, up from $34.7 billion in 2007…

At J.P. Morgan, the nation’s largest bank by assets, the head count associated with what it calls “controls,” which includes many compliance-related staff, has grown to 43,000 in 2015 from 24,000 in 2011…

I have a few comments.

The first is, “Good.” These companies forgot that their very purpose is to foster economic growth and development and to help money and credit circulate around the business world. Finance is a utility and ought to be treated as such. Utilities are highly regulated because of how critically important their health is to society. Banks are equally important and their health is of paramount concern, not their profit growth. A profitable bank is a healthy bank, of course, but the question is about where the profits come from.

Source: The Reformed Broker

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