CEOs of seven of the biggest banks in the U.S. responded to some questions from members of the Congress on Wednesday. Some of the questions were about potential risks to the financial system and other concentrated more on politically-related subjects.
Photo: Photo For The Washington Post By J. Lawler Duggan
Participants in the meeting:
Jamie Dimon – JPMorgan Chase
David Solomon – Goldman Sachs
James Gorman – Morgan Stanley
Brian Moynihan – Bank of America
Ronald O’Hanley – State Street Corporation
Charles Scharf – Bank of New York Mellon
Michael Corbat – Citigroup
According to Ap News, this is the biggest gathering of the banking industry leaders before the House Financial Services Committee for a consultation since the 2008-2009 financial crisis.
The CEOs assured the Congress that they have taken measures to guarantee the stability of their financial institutions since the 2008 crisis. They declared that they are stronger than they were before the financial crisis and more protected from potential risks.
“There is no doubt that the strength, stability, and resiliency of the financial system has been fundamentally improved over the course of the last ten years. Post-crisis reforms have made banks much safer and sounder in three important areas: capital, liquidity and resolution, and recovery.” Said Jamie Dimon of JPMorgan
The reason for this meeting is the 10-year anniversary of the 2008-2009 financial crisis. The banking system required a bailout from the U.S. taxpayers in order to survive the crisis, the banking system itself caused.
The seven banks showing up before the House Committee received $700 billion under the Troubled Asset Relief Program, and in total, they paid $160 billion in fines for many crimes and violations that caused the housing bubble.
“I am worried that few of these foundations are just too enormous to deal with their own tasks, too huge to serve our networks and too huge to think about the mischief they have caused,” said Maxine Waters, Chair of the House Financial Services Committee.
The conference had some strategy questions, yet numerous individuals from Congress took as much time as necessary to solicit politically-charged inquiries from the CEOs, on subjects running from firearm guidelines to official pay to environmental change. Democrats took as much time as is needed to praise Bank of America and Citigroup’s choice not to fund weapon fabricating organizations, while Republicans went ahead to lambast them. Democrats additionally engaged a huge piece of their time on whether banks appointed an excessive amount of capital toward stock buybacks as opposed to reinvesting in their individual organizations.
Jim Himes, Chair of the New Democrat Coalition, asked all CEOs what they consider the more at risk product in the banking system. No one of the CEOs mentioned the house mortgages, the product that is responsible for the 2008 crisis. The bank representatives outlined 2 products as most at risk. Cybersecurity and corporate loaning, or loaning to organizations with already substantial debt.
Another risk referenced was “shadow banks,” which is a term used to depict non-bank organizations getting into financial services, especially Fin-Tech companies.
Some Important Points About the Monetary System
While the biggest bank representatives are confident about our banking system health, 10 years ago at the heart of the 2008-2009 financial crisis, Satoshi planted the seed for a new financial order based on more freedom and transparency.
Recently the gold has been performing better and the confidence in our monetary system has been going down. Many think that we are at the gates of a recession that will be by an inflationary nature. Feed needs to lower rates at least 4%, but they can’t do that when they are at 2.5%. They need to go fist at 4% to cut 4% interest rates. But how can they go to 4% without causing the recession? Simply they can’t. That would sing the stock market and the housing market and would slow the economic growth.
While bankers think that Crypto is a threat for the banking system we think that this banking system has been a burden on the taxpayer paying for their bailouts. It is time to short the bankers and to long precious metals and crypto.