Top Banks Looking To Washington For Growth, Clarity

According to recent reports in the Wall Street Journal, some of the U.S.’s largest banks are looking to Washington, D.C., to push forward regulations that will promote growth.

CEOs at major banks including U.S. Bancorp and Morgan Stanley have echoed similar sentiments, stating government regulations will be key for further growth.

According to Morgan Stanley CEO James Gorman, lower corporate taxes and more streamlined bank regulation could “allow U.S. banks to be greater engines of economic growth.” His comments came during Morgan Stanley’s call with analytics to report second quarter earnings.

Similarly, during its own Q2 earnings calls, U.S. Bankcorp CEO Andrew Cecere said regulators have an opportunity to turn bank regulation into something “conducive to growth.”

“I just spent time in Washington last week and left very encouraged by the open and productive dialogue that is taking place,” Cecere said.

But while many bank CEOs have fixed their eyes on Washington to promote industry growth, not every executive is optimistic. Earlier this month, James Dimon, JPMorgan Chase’s CEO, said political gridlock is stunting the nation’s economic performance. He went so far as to say “It’s almost an embarrassment” to be an American citizen, according to reports.

Last month, Cecere expressed frustration over a lack of clarity on rules pertaining to infrastructure spend, tax, trade and healthcare, an issue he said was forcing many corporate customers of the bank into a wait-and-see approach before they expand.

M&T Bank Corp chief financial officer Darren King told the WSJ that he, too, recognizes political gridlock.

“If you’re in healthcare, it’s uncertainty about the Affordable Care Act. If you’re in construction or heavy equipment, it’s uncertainty about whether we’re going to have an infrastructure bill,” King said.

Still, others remain a bit more positive about the potential for regulators to simplify the rules for top FIs.

“There’s a very strong focus on how we move the economy forward, and how we’re going to create jobs — what we can do within the banking industry in order for us to help stimulate that economic growth,” said U.S. Bancorp chief financial officer Terry Dolan in an interview with the WSJ.

Reports noted during U.S. Bancorp’s earnings call, Dolan mentioned corporate customers are borrowing for minor M&A activity, not capital expenditures.