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Stanford University Professor Anat Admati on the regulatory environment for the financial sector.
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Durham district attorneys in US attorneys -- out there every day squeezing ordinary citizens.
On sometimes very thin grounds.
And taking them to trial.
In order to make an example as they put it.
I'm really concerned that too big to fail has become too big for trial but just seems wrong.
-- that was senator Elizabeth Warren taking financial regulators to task for not being tough enough on large banks.
She's taken a lot of criticism for her tough questions but Warren has also received.
A lot of support for finally cracking down on the banks.
So is she getting too tough for her own good at joining me now.
For more on this is not a -- professor of finance and economics at Stanford graduate school of business and author of the bankers -- closed.
And not thank you for joining us and -- pretty.
Is it she -- did you hear far she was really chiding those regulators you're not be and often not.
You know we hear a lot of that from Elizabeth Warren -- here she is back and -- -- doing the same thing.
Well I think she's asking what -- Is asking.
Every -- we have scandals with the banks and then there seem to be of some kind of a double standard especially when we hear.
Somebody from Justice Department saying that they worry about weakening the -- sold does being too big to Freddie give somebody.
You -- need well rightly so are financial institutions are very important and essential today.
Success of this country so we don't want to over regulate the banks we don't want -- over restrict them to the point where they can't.
Be successful so I think the concern that you do here I don't think everybody's asking are we being -- -- on the banks.
I think the concern we ask is there are we being too tough.
What I don't think somebody -- every way way there's one way in which are being completely lenient on the bank -- many as a way that most businesses in the economy.
Have to face up to which is who there is -- losses when you lose.
The banks are able to borrow at subsidize rates and they don't have to own up to the full consequences of what they do.
So there's no business in the economy bad that it even without regulation at all.
That has borrows more than 70% of their assets most of them borrow especially large corporations a lot lesson that.
What about -- single digits and then they complain so they don't like to have to face.
Equity investors say just wanted to complain to the regulators that they could borrow cheaply -- average volume we -- And on those banks to then turn around and issue loans to the American people and outside this country is whilst that's very important -- I would think hearing I guess.
What if you think that the here still today getting preferential treatment as much as the -- -- have cracked down on them.
Up completely on this one issue that we write about in the book.
They're getting completed preferential treatment not just -- -- -- -- as well and it's very bad for the economy.
Because we won't most businesses to -- -- -- as much as possible on their own but the banks so way to dependent on.
Guarantees and subsidies and that's makes the industry externally and -- So when you get so I highly indebted -- you don't make boring business loans you just like to go.
Play -- -- -- so the question is why Arab banks not lending.
Their earnings like every other company uses they -- -- pay them out but the amount of money but remember OK I don't so.
Bottom line remember banks are are their private institutions there in it to make money they need to find ways to be profitable.
-- banking analyst Dick -- bay you're probably familiar with his name -- of very well renowned analyst.
She -- that recently said.
I had her supporters really referring to Elizabeth Warren put up some thirty million dollars to buy her senate seat she -- her constituents an awful lot -- she's gotta take.
A strident position against.
The banks.
You say what to that.
Is.
I think she's been completely consistent for supporter -- supporter her they know what they were getting and she's doing precisely what she was doing before which is.
-- -- questions about whether we're getting ahead the best -- banking system that we can and I think club most of those who are elected get.
Supported by people and often from the industry to.
All right so.
I think -- presented both sides of this story thanks -- not for joining us tonight.
Okay thank you.
