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ABA CEO on Regulation

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    American Bankers Association CEO Frank Keating explains how regulations are hurting banks.

  • Duration 3:43
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Hello did it Morgan and -- -- -- -- -- bank earnings tomorrow this comes after JPMorgan chairman Jamie Dimon said these regulations are costing his company.

Nearly a billion dollars a year.

For more on this we -- joined by Frank Keating CEO and president of the American Bankers Association.

Sir I'm so glad you're with us -- this is a common theme we're hearing these new banking regular regulations are costing companies money.

And as a result shareholders.

Which -- you're absolutely right and Jamie Dimon and frequently is controversial -- certainly colorful.

But he's also right and I think kept policy makers and regulators.

Should pause when you consider that a bank.

A billion dollars to regulation that's in addition to what -- spending.

That means you're home loans furor.

A small business loans -- start -- loans that's not god.

Basel III is something that is a construct from Europe that will be enormously expensive it's confusing.

Frequently contradictory certainly very very difficult to fathom.

The big banks probably can tread their way toward -- the smaller institutions -- -- at the regionals and the community banks are very unique banking system in America.

It will not be easy if not it will be impossible for them to conform and comply this is -- very worrisome series of steps.

Dodd-Frank is 9000.

Pages of proposed and final rules.

A hundred rules not even proposed as -- -- written as yet Basel III or Basel two rather.

Very very difficult thing to swallow it's gonna cause indigestion -- -- the banking community.

So just so people understand quickly these Basel rules were created to prevent take -- at risk basically banks have to keep a certain amount of cash in the coffers in case of emergency.

Basel III now we're really asking them to hold four point 5% common equity 6% -- tier one.

Assets and as you said that means that's less money that is available to go out into the system.

How -- gonna hurt the economy that's trying to recover right now.

-- -- -- example is I was saddened at the -- I'd be fed international banking federation conference in Johannesburg last week and when we mention.

The American delegation mentioned that -- the that the fact that we are facing this huge Basel III drag on our ability to land.

They several it shouldn't apply to anybody except those her in the international banking marketplace so.

The amount of money that will not be available because of the complexity of these rules mortgage loans second mortgage loans home improvement loans.

Bank small banks community banks from sea to shining -- Are gonna have to get out of that business -- -- who's gonna do it there isn't anybody to do it.

And it's set at its there's no reason.

For this kind of burden on community banks in America right and that billion dollar figure for a big bad that's bad that means that big institution is going to be able to provide the service today.

Rightly said this is something that you mentioned that you don't you don't think these -- should be based on the size of the bank to be based on the business if you have an international business you file these international rules.

If you -- local community bank which you represented in 90% of your constituents are.

You should not have to follow these rules is there any way are you see any -- into the tunnel that -- like this will be fixed.

Well we've asked that the regulators the Federal Reserve board -- in particular and all the other regulators.

Not just deposits but to stop and back up and start -- new.

There's certainly no reason for us to gender -- to what every Europe wants we have started and do it ourselves for those were very unique banking system.

Governor Keating thank you for taking the time in your right we should just look ourselves and the mayor would kind of follow the crowd thank you sir you better believe thanks Jason.

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