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American Banker Editor-in-Chief Neil Weinberg on a government report on the 19 biggest U.S. banks.
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And on the different note here's a big news story that's not getting a lot of attention and it should.
A shocking new government report shedding light on just how poorly the nation's biggest banks are being run.
And guess what -- found more than two and a half years after the passage of Dodd-Frank if another financial crisis happened right now.
Many of our big banks might need another taxpayer bailout.
Here with the exclusive story Neil Weinberg he's editor in chief of American banker you know welcome back to the show -- -- big banks are -- shape why.
Well lousy shape in the sense that the one of them.
Big regulators the Office of the Comptroller of the Currency which looks at the big banks decided we didn't get things right we weren't looking at the right things before the last financial crisis so we're going to start looking.
In a more broad way of what the banks do to avoid crises and it looked at nineteen -- nineteen biggest banks.
And in five different categories they virtually all failed and everything Jerry.
That's typically we feeling better so telling what banks are we talking about it we have a full screen but some of the biggest banks out there Bank of America JPMorgan yeah.
Visit the usual list of suspects -- like you're saying right here.
Well they didn't name names in this was not even a report that was made public this was something that one of my colleagues -- -- had gotten.
Through sources and what it showed was that actually all of nineteen largest banks by assets which of course would include all the banks referring to yeah.
-- -- -- Unbelievable you know you bail them now they change the law and -- told everything's going to be okay and at the end of the day they're no better off.
Now this brings in fit into sharp relief Dodd-Frank why isn't Dodd-Frank making things better well Dodd-Frank -- -- is still very much in the implementation phase but I think part and parcel where this is the question of whether.
Can we micromanage these giant banks it raises that question is this the right approach we have Dodd-Frank 848 pages 101000 pages of regulation already.
And -- is this making the system safer -- our tax code make us give us a fairer tax system.
So the question is whether.
The crystal ball that this office of the comptroller of the currencies using music and have a better crystal ball than it had before.
It's hoping so it's trying I think this is a good product that's not -- anything else.
If I think you know regulators did see the last crisis the likelihood of their sing the next crisis you know not high that's what I would say but it.
What were regulators looking -- what kind of metrics were they measuring in this -- Where previously they were looking at fairly narrow things things like the risk liquidity risk interest rate risk -- Different things happened in the financial markets.
Would this blow up the banks and now what they're trying to do is look more broadly for example what sort of risk management systems to these banks have in place.
Are they planning for the next CEO.
Bomb are they communicating to the employees what sort of risks they want to undertake they're saying this is.
How many how -- that would -- -- Morgan chase right they made that big bet and lost a ton a -- And that's the kinds of risks you're talking exactly so you can say that may be regulators are trying to take a more pardon for using this word holistic approach.
But at the same time they only knew -- if they only oh my gosh they're so far away from what really goes on in these banks it's hard for them.
To even understand the businesses.
How likely do you think it is that we have another bailout.
Well I think obviously.
One -- have the next crisis will learn if we have the next bailout certainly the question is when interest rates go up what is going to happen but really it also raises the question to your point -- Is this the right approach or should these banks be broken up and the question of course do you have faith in the markets.
And the idea that we don't have all the -- police are monopolies or do you have faith and regulators send even good faith regulators don't have perfect crystal balls.
Now they -- -- we've found that out not too long ago Neil thanks for coming on it's always great to have you here really enjoy what you have to say and that's.
This is a report that should get more attention is thank you so much for bringing it to it's my pleasure.
