Hi friend, 

Too often after a crisis and the wave of media attention that follows, everyone moves on to the next story without truly understanding what happened and how we can prevent it from happening again. Sometimes that’s just media shortsightedness, but often it is an intentional strategy to serve the ends of those who do not want to be held accountable or who do not want change, no matter how important that change would be.  In this case, the financial industry and its allies are already shifting the conversation about the banking crisis precipitated by the collapse of Silicon Valley Bank and trying to limit the blame to a few reckless executives and incompetent regulators.  

But we’re not letting the conversation move on quietly without fighting for real change that better protects Main Street families, workers, small businesses, and community banks. While there’s lots of blame to go around and everyone could have done better, we know that the actual causes of the crisis were predictable. The combustible mix of weaker rules enacted during the Trump administration and deficient supervision by the banking agencies incentivized bank executives to take excessive risks and engage in irresponsible and reckless behavior. The good news is that the actions necessary to change this are well known, not particularly complicated, and the least costly option.

Our May 10th webinar is available to watch here. 

This month, we detailed these actions in a timely policy brief, an in-depth report on Banking Enforcement, and a live webinar that you’ll learn about more below.

We need policymakers and regulators to act now to prevent the next crisis with the same level of urgency and decisiveness that they acted to respond to the crisis once the banks started collapsing.  Responding with multi-year rulemakings that the financial industry will aggressive oppose guarantees another crisis if not crash before any meaningful response to the last crash.  That will sow the seeds of the next crash and virtually guarantee that it’ll be worse than the last one.  The American people can’t afford that and deserve better.  Now is the time to hold Wall Street and regulators accountable, strengthen the banking system, and protect Main Street.

On a closing note, Better Markets is moving! After 13 years, this is the last month in our K Street office. Our new office will be located at 2000 Pennsylvania Avenue NW, Suite 4008, Washington, DC, 20006.

Best,
Dennis

Dennis Kelleher
Co-Founder, President & CEO, Better Markets

As we explain in our Banking Enforcement Report, egregious bank conduct must be counterbalanced by a strong regulatory regime and an assertive banking supervision approach that regularly uses stronger enforcement actions by the banking agencies that oversee large banks.  Only then will banks and bankers be properly incentivized to prioritize safety, soundness, and financial stability, which protects Main Street families, workers, small businesses, community banks, our financial system, and the entire economy.

The perfect storm of weaker rules and lax oversight by the banking agencies incentivized bank executives to take excessive risks and engage in irresponsible and reckless—if not illegal—behavior because they get to enrich themselves very quickly by basically gambling with other people’s money. Better Markets detailed 10 actions that policymakers need to take to prevent the banking crisis from getting worse and repeating.

Dennis Kelleher participated in a panel on the developments and risks of nonbanks at the Federal Reserve Bank of Atlanta’s 2023 Financial Markets Conference. He explained that if we have major surprises and turmoil in the regulated banking sector, we should be very worried about the risks in the unregulated nonbank sector. 

Despite industry talking points touting so-called “stable” coins as an innovative and inclusive form of payment, they have not lived up to the hype as a payment mechanism outside the unregulated crypto ecosystem. Regulators and policymakers should stop and consider the risks to investors, consumers, and the economy before allowing such products to be used as a form of payment.

“No mergers should be allowed that result in making the too-big-to-fail problem worse. That only sows the seeds for the next crisis, which will likely be much worse.”

– Dennis Kelleher for CNN

May 1
JPMorgan’s acquisition of First Republic revives too-big-to-fail talk

May 3
Big Hedge Funds Face New 72-Hour Deadline to Report Losses

May 5
Here’s what the SEC will require under its strict new stock buyback disclosure rules

May 17
Clawing back exec pay at failed banks has support — but it's not easy

Each month our legal team outlines some of the top cases we're keeping an eye on, the Amicus "Friend of the Court" Briefs we have filed, and why everyone with a bank account, credit card, mortgage loan, or retirement loan should be interested in those cases.  

Our government affairs team closely tracks important legislation and works with members of Congress, their teams, and Congressional committees to ensure financial reform issues are a priority.