Bank Regulation

Bank CEOs To Assure Congress The Financial System Is Stronger Now

The heads of some of the nation's biggest banks will stress how much more secure the financial system is thanks to regulations following the Great Recession of 2008 and 2009 during congressional testimony this week.

According to a report in The Wall Street Journal, the CEOs of JPMorgan, Citigroup and Goldman Sachs plan to present the House Financial Services Committee with an upbeat assessment of the banking industry.  The hearing is the first time since February of 2009 that all three CEOs will be together on a panel before Congress. The hearing is part of House Democrats’ plan to look at the financial sector and its practices over the past ten years since the financial crisis.  Over the decade, the banking industry has more capital and is healthier. Public ire against the sector has also diminished over the years.

“There is no doubt that the strength, stability and resilience of the financial system has been fundamentally improved over the course of the last 10 years,” Jamie Dimon, head of JPMorgan, will say in prepared remarks. Dimon is the only CEO who has had his job since the Great recession.  “Postcrisis reforms have made banks much safer and sounder in three important areas: capital, liquidity and resolution and recovery,” he added in the prepared testimony. The paper noted Dimon will also call on Congress to address healthcare costs, improve infrastructure and offer recommendations on how to handle immigration.

Meanwhile, the CEO of Citi, Michael Corbat, said the bank has taken steps to better handle risks and has tightened its money laundering controls, has clamped down on traders engaging in bad behavior and is being a better advocate for consumers.  “Creating a strong culture of compliance does not mean we will never make another mistake,” Corbat said in his own remarks, reported The Wall Street Journal. “What it does mean is that we have a governance structure in place that helps us identify mistakes and misbehavior, learn from them and hold ourselves accountable for whatever actions preceded those episodes.”

In addition to JPMorgan, Citigroup and Goldman Sachs, CEOs from Morgan Stanley, Bank of America, State Street and Bank of New York Mellon will testify.

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