U.S. Senate Reaches Deal To Loosen Banking Regulations.

PRESS RELEASE

U.S. Senate Reaches Deal To Loosen Banking Regulations

Nov. 14, 2017 (EIRNS)—"Further loosen banking regulation?" you ask, incredulous. "Isn’t that like feeding prune juice to a patient with dysentery?"

And yet Fox News reported today on this move in the Senate, which take things in the exact opposite direction of the required return to Glass-Steagall:

"The bipartisan Senate agreement released Monday would relieve small and regional lenders from a number of restrictions meant to limit the damage firms could cause to the economy in the event of another crisis. In what would be the biggest step to ease the financial rule book since Republicans took control of Washington, the proposal could cut to 12 from 38 the number of banks subject to heightened Federal Reserve oversight by raising a key regulatory threshold to $250 billion in assets from $50 billion."

The bipartisan deal was brokered by Senate Banking Committee Chairman Michael Crapo (R-Id.), and was co-sponsored by nine Republicans, including Tim Scott of South Carolina and Bob Corker of Tennessee, along with nine Democrats, including Joe Donnelly of Indiana and Heidi Heitkamp of North Dakota. "That is enough to clear both the banking panel and the full Senate, assuming all Republicans in the chamber support the bill," Fox reported with satisfaction.

The legislative concept of the bill may have started out as removing Dodd-Frank requirements for community banks and others which have no derivatives exposure, as proposed by Federal Deposit Insurance Corporation Vice Chairman Thomas Hoenig; but in the final analysis, Wall Street and the American Banking Association got what they wanted. Quintupling the size of banks designated as SIFIs (Systemically Important Financial Institutions) will encourage one thing: bank mergers among regional banks, and acquisition of more small banks by the big regionals. Thus, this legislation would help community banks ... to disappear more quickly. It will not increase lending, any more than cutting corporate taxes will increase wages.