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SIFMA today released the following statement after Senators Sherrod Brown (D-OH) and David Vitter's (R-LA) introduced legislation to address "too-big-to-fail."
"We continue to believe that no institution should be too-big-to-fail and that taxpayers should never again be put at risk in a future financial crisis. Since 2008, Tier 1 capital has more than doubled - increasing about $400 billion, or from 5.6 percent to 11.3 percent at the end of 2012 - reaching a historic high according to the FDIC. This legislation would force financial institutions to raise capital excessively higher than current levels, which would limit an institution's ability to lend to businesses, hampering economic growth and job creation.
"It also calls for the U.S. to pull out of the Basel Committee framework. Such a move would be an abdication of US leadership, would undermine uniform global capital standards, and actually increase systemic risk by driving more business outside the U.S. and into the shadow banking sector.
"Dodd-Frank set forth a framework that would effectively address too-big-to-fail through new, heightened prudential and capital standards, something that this legislation ignores. We should focus on completing the remaining rulemakings mandated by Dodd-Frank instead of enacting new legislation that would undermine the U.S.'s standing in the global financial system."
