my community my bank

Facts

“Nobody should be too big to fail. If I don’t provide the leadership this company deserves and needs and we run it into the ditch, I should be fired and shareholders should take the first loss without taxpayers having to bail out anyone.”
John Stumpf, Wells Fargo President and CEO (04/30/10)

“The single most important thing we can do to ensure that such a financial tragedy does not happen again is to split up our six largest financial institutions into commercial banks and investment houses and impose size caps on both.”
Senator Edward E. Kaufman (D.-Del.), (04/20/10)

“It is precisely this ability to foster bottom-up growth through small businesses that sets community banks apart from other financial institutions. Unlike the big financial institutions we see in the headlines for bailouts and bonuses, community banks do not pose systemic risk to our financial system, nor are they identified as primary contributors to our latest crisis.”
Senator Kay Bailey Hutchison, (R.-Tex.) (04/16/10)

“I know this much: Big banks interact with the economy and financial markets in a multitude of ways, creating connections that transcend the limits of industry and geography. Because of their deep and wide connections to other banks and financial institutions, a few really big banks can send tidal waves of trouble through the financial system if they falter, leading to a downward spiral of bad loans and contracting credit that destroys many jobs and many businesses, creating enormous social costs. This collateral damage is all the more regrettable because it is avoidable.”
Richard Fisher, Dallas Federal Reserve Bank President and CEO (04/14/10)

“The new regime should permit regulators to close a failing firm and impose losses on shareholders and creditors. Indeed, I would argue that no financial instrument counted as regulatory capital should be allowed to receive any protection from losses. At the same time, regulators must have the tools necessary to minimize the associated disruption to the financial system and the broader economy.”
Ben S. Bernanke, Federal Reserve Chairman (04/07/10)

"There is an expectation that very large and complicated financial institutions will not be allowed to fail. Unless that conviction is shaken, the natural result is that risk-taking will be encouraged and in fact subsidized beyond reasonable limits."
Paul A. Volcker, Recovery Advisory Board Chairman, Former Federal Reserve Chairman, (03/31/10)

“So I think one of the major issues that we absolutely have to confront in society is this too-big-to-fail issue. These very important, systemically important institutions that came so close to failure that we had to come in and supply a lot of liquidity, and in a few cases – AIG, Bear Stearns – supply special (liquidity). I think that has left a very serious problems. In that those institutions seen as too big to fail will not be subject to market discipline. So no institution should be free of market discipline. Every institution should be able to fail in some way, shape or form. The trick is having that failure happen in a way that doesn’t endanger the economy and the financial system, and doesn’t lead them into bankruptcy.”
Donald L. Kohn, Federal Reserve Vice Chairman (03/24/10)

“As a nation we have violated the central ten[e]ts of any successful system. We have seen the formation of a powerful group of financial firms. We have inadvertently granted them implied guarantees and favors. We must correct these violations. We must reinvigorate fair competition within our system in a culture of business ethics that operates under the rule of law. ...”
Thomas M. Hoenig, Federal Reserve Bank of Kansas City, President (03/24/10)

"Job number one must be to level the playing field once and for all and to put an end to the doctrine of too big to fail."
Sheila C. Bair, Federal Deposit Insurance Corporation Chairman (03/19/10)

“As the FDIC is now able to do with a failing bank, the government should, under appropriate circumstances and with appropriate safeguards, be able to seize and wind down a failing, systemically critical firm. If, in the end, funds must be injected to resolve a systemically critical institution safely, the ultimate cost must not fall on taxpayers or small financial institutions, but on those institutions that are the source of the too-big-to-fail problem.”
Ben S. Bernanke, Federal Reserve Chairman (03/20/10)

“As the crisis has shown, one of the greatest threats to the diversity and efficiency of our financial system is the pernicious problem of financial institutions that are deemed too big to fail. It is unconscionable that the fate of the world economy should be so closely tied to the fortunes of a relatively small number of giant financial firms.”
Ben S. Bernanke, Federal Reserve Chairman (03/20/10)

“Today, the financial system is operating under the same rules that led to its near-collapse and to this deep recession. These rules must be changed to address the moral hazard posed by large, interconnected financial institutions considered “too big to fail.” The Administration has proposed comprehensive financial reforms that seek to address this moral hazard by forcing these institutions to internalize the risks they impose on our financial system and to remove expectations of government support.”
Herbert M. Allison, Jr., Assistant Secretary of the Treasury for Financial Stability (03/04/10)

“The reform process cannot be judged a success unless it substantially reduces systemic risk generally and, in particular, the too-big-to-fail problem.”
Daniel K. Tarullo, Federal Reserve Board of Governors (02/26/10)

"The goals of financial reform are simple. To make the markets for consumers and investors fair and efficient, to lay the foundation for a safer, more stable financial system less prone to panic and crisis, to safeguard American taxpayers from bearing the risk that ought to be borne by shareholders and creditors, and to end once and for all the dangerous perception that any financial institution is too big to fail."
Neil Wolin, Deputy Treasury Secretary, (02/02/10)

“‘Too big to fail’ banks have a strong incentive to gamble: If they win, they walk away with the profits; if they lose, the taxpayer picks up the tab. The bailouts blindly saved big banks while smaller banks went bankrupt -- 140 in 2009 alone -- leading to an even more concentrated banking system. ”The new rules the administration is proposing are not intended to punish the big banks but to create a sounder financial system. Because the big banks are, effectively, insured by the government, they have had a competitive advantage that isn't based on greater efficiency but on implicit subsidies and political connections. They are not only too big to fail, they are too big to manage; they are, in fact, too big to be.”
Joseph E. Stiglitz, former Council of Economic Advisors Chairman, Nobel Prize Economist (01/29/10)

“If financial institutions are too big to fail, they are too big and should be broken up.”
Nouriel Roubini, Professor, New York University Stern School of Business and Roubini Global Economics Chairman (01/28/10)

“There should be no entity in a capitalist system that is too big to fail…As to allowing regulators to basically set limits to the risk and the size of banks, that is also a step in the right direction. I think I would prefer to go a little bit further and use the antitrust laws to make sure that no financial institutions got simply too large that they were, in effect, too big to fail.”
Robert Reich, UC Berkeley Public Policy Professor, former Labor Secretary (01/25/10)

“Never again will the American taxpayer be held hostage by a bank that is "too big to fail."
Barack Obama, President (01/21/10)

“ICBA has said that ending the too-big-to-fail policy is one of the most urgent goals facing the nation and the only way to truly protect consumers, small businesses and the economy. Institutions that are so large and so complex that their failure would pose a grave threat to the financial system, taxpayers and economy must be eliminated to avoid future financial crises. Financial regulators must be given the authority to restructure, downsize and even dissolve, in the most extreme cases, the institutions that fall into this category.”
R. Michael Menzies, ICBA chairman and president and Easton Bank and Trust Co. CEO and Camden R. Fine, ICBA president and CEO (01/21/10)

"No institution, including our own, should be 'too big to fail…. The solution is not to cap the size of financial firms. We need a regulatory system that provides for even the biggest banks to be allowed to fail, but in a way that does not put taxpayers or the broader economy at risk."
James Dimon, J.P. Morgan Chase & Co. Chairman and CEO (01/13/10)

"In retrospect, many firms were too highly leveraged, took on too much risk and did not have sufficient resources to manage those risks effectively in a rapidly changing environment.”
John Mack, Morgan Stanley Chairman (01/13/10)

"We absolutely have to move to a world in which no firm is too large, too interconnected, too complex, to systemically significant, to fail."
Dennis Lockhart, Federal Reserve Bank of Atlanta President (01/11/10)

"We now have a financial system that is completely based on moral hazard. All the big banks left standing believe that they are immune from any future failure because that’s what happened in the last year. And crazy things happen when you have a financial system like that....For the six major banks of the United States, their total balance sheet is over 60 percent of U.S. GDP. [The banks] got bigger during the crisis. All the big guys are out there looking to take risk. So would you -- and so would I -- if we felt we were immune. If you had a 'get out of jail free card,' wouldn't you go take a lot risk right now?"
Simon Johnson, Professor, MIT Sloan School of Management (01/08/10)

“In an effective capitalistic system, you have to allow institutions to fail and then have renewal. Beginning to break them, to dismember them, is a fair thing to consider…. Too-big- to-fail needs to be addressed.”
Thomas Hoenig, Federal Reserve Bank of Kansas City President (01/05/10)

“I want to be very, very clear: too big to fail is one of the biggest problems we face in this country, and we must take action to eliminate too big to fail.”
Ben S. Bernanke, Federal Reserve Chairman (12/16/09)

“There are a lot of ways to regulate ‘too big to fail’ financial institutions: break them up, regulate them more closely, tax them more aggressively, insure them, and so on. And I'm totally in favor of increased regulatory scrutiny of these banks. But those are all regulatory tools. Regulations, over time, fail. I want to see Congress focus more on a credible system for liquidating the banks that are considered too big to fail. The little guys aren't immortal; they pay for their mistakes. The big guys can't be immortal either. A free market cannot operate in a too-big-to-fail world.”
Elizabeth Warren, Congressional Oversight Panel Chair, Harvard Law School Leo Gottlieb Professor of Law

“No firm ought to be too big to fail. Not only does the too-big-to-fail badge generate moral hazard at these institutions, it also creates powerful incentives for other institutions to become large and complex and take risks at taxpayers’ expense.”
Charles Plosser, Federal Reserve Bank of Philadelphia President (12/04/09)

"We have an enormous 'too-big-to-fail' problem in this country. All the problems that people have talked about – the bonuses, the unfair playing field, the government-backed stocks – all of that falls in 'too-big-to-fail.' And the best thing that we can do to solve that problem—to create market discipline for those firms and to force them to play on an even playing field – is through regulatory reform that will address 'too-big-to-fail."
Ben S. Bernanke, Federal Reserve Chairman (12/03/09)

“’Too big to fail’ must die…. Never again should American taxpayers have to bail out high-flying financiers when their risky bets go sour.”
Paul E. Kanjorski, House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises Chairman (11/13/09)

“I would compartmentalize the industry for the same reason you compartmentalize ships. If you have a leak, the leak doesn’t spread and sink the whole vessel. So generally speaking you’d have consumer banking separate from trading bonds and equity.”
John S. Reed, Former Chairman and CEO of Citicorp, Citibank, Citigroup. (11/06/09)

“The critical problem that we have, which we've got to resolve, is the too-big-to-fail issue. That is to me the major issue which is, if we do not confront it, we are going to be in terrible shape. So I don't have a simple solution, but that something has to be done. There is no doubt in my mind -- and I don't think merely raising the fees or capital on large institutions or taxing them is enough…. In 1911, we broke up Standard Oil. So what happened? The individual parts became more valuable than the whole. Maybe that's what we need.”
Alan Greenspan, Former Federal Reserve Chairman (10/15/09)

"[Too-big-to-fail] is at the top of the list of things that need to be fixed. It fed the crisis, and it has gotten worse because of the crisis."
Sheila C. Bair, Federal Deposit Insurance Corporation Chairman (08/28/09)

"[T]he belief of market participants that a particular firm is considered too big to fail has many undesirable effects. For instance, it reduces market discipline and encourages excessive risk-taking by the firm. It also provides an artificial incentive for firms to grow, in order to be perceived as too big to fail. And it creates an unlevel playing field with smaller firms, which may not be regarded as having implicit government support. Moreover, government rescues of too-big-to fail firms can be costly to taxpayers, as we have seen recently. Indeed, in the present crisis, the too-big-to-fail issue has emerged as an enormous problem."
Ben S. Bernanke, Federal Reserve Chairman (03/10/09)

"Americans today appreciate the serious hazards and consequences of excessive financial concentration. They witnessed our whole economy being held hostage because of the reckless behavior of a few huge wayward Wall Street financial firms. They saw those giant institutions, instead of being held accountable, propped up with trillions in taxpayer money because they were too big to punish… Our task now as a country is to ensure the economic chaos and human suffering of the past few years is never repeated."
Camden R. Fine, ICBA President and CEO (06/09)

"Uninsured counterparties have little reason to engage in risk analysis, let alone act on such analysis, if they believe that they will always be made whole under a de facto too-big-to-fail policy by government's recourse to the procedure for exception to the least-cost resolution requirements of FDICIA (the Federal Deposit Insurance Corporation Improvement Act)."
Alan Greenspan, Former Federal Reserve Chairman (05/10/01)