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Sen. David Vitter (R-LA) on his push for higher capital surcharges for big banks from regulators.
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-- -- -- event and joins me now with more on this story so -- thank you for joining us.
I actually I just the first question is doesn't -- -- the big banks already meet the criteria.
Outlined in the Basel III agreement.
They do we're talking about going beyond that.
I'm not sure exactly how much would be the right amount but we're talking about going beyond that requirement I don't think Basil three -- -- that capital cushion.
We need for future contingencies I also don't think it equal losses the playing field because.
Too big to fail which is not dead it's alive and well unfortunately it's really institutionalized.
By Dodd-Frank.
Is the mega banks and advantage including cheaper capital calls.
But senator in this economy which you know continues to struggle to get a foothold -- -- is low credit is hard to get.
You could argue could near the banks should be reducing their capital at a time like this.
Well look I think we need to look to the future and and think about safety and soundness not have another crisis.
But also banks aren't lending a whole lot as it is I don't I don't think the capital margin is a huge -- there I think there would still be.
Plenty of liquidity and capital to land and it's a function of deals that make sense.
But even increase the levels -- a certain point but they have to cold in loans and sell off assets in order to meet those requirements and other could be if phase in period so that it wouldn't have to have dramatic action could be phased ban.
Over time I think the good news is that after we sent our lettering in the Fed as you -- announced an extension of the comment period on this.
Very issued by over a month.
So I hope that means they're taking this serious -- looking at it.
Very carefully.
So you've been I have written some previous statements you say the mr.
Bernanke the Fed really has missed a huge opportunity is you put it.
To address the too too big to fail issue do you believe that.
Yes so far so far what we've seen as an avalanche of new.
Very complicated often confusing.
Regulations.
I don't think that makes -- much safer at all.
I think are simpler more systemic changes like.
Increase capital requirements for the mega banks would be much more effective doing not think this avalanche.
Of confusing regulation.
Adds a whole lot more cost than it does security or safety.
Do you get the sense that mr.
Bernanke is somewhat hesitant to impose this extra charge on the -- the biggest banks.
We're certainly has been today but again the fact that they extended.
They're comment -- on this very issue after receiving our letter I hope is a positive sign from a policy point of view that I'm advocating.
Does it make the banks less competitive in some sense and other.
You know certainly there arguing that again I think safety and soundness including for the taxpayer has to come first.
And I also think we can still handle the needs of the economy.
Even with these capital requirements it may take more than one bank to participate in bigger deals but that -- very doable.
All right good stuff senate that a thank you so much enjoy -- -- labor -- think here of interest things topic and should.
