Paul Merski, group vice president for congressional relations and strategy at the Independent Community Bankers of America, rejected that argument, saying banks aren’t looking for handouts but instead want to see credit flowing to small businesses that are at risk of shutting their doors.
„There are no bank bailouts needed because the banks going into this pandemic are in extremely solid positions, both with capital levels and liquidity levels,“ Merski said. „This is absolutely not a 2008 situation. It’s the reverse.“
On Capitol Hill, the current potential legislative vehicle is a „phase 3“ stimulus package but Congress will likely pass additional legislation to address the economic fallout of the pandemic. Among the industry’s asks are recommendations that would let banks more freely dip into their financial buffers and allow more time to comply with a new accounting standard that requires them to immediately record potential losses on their books when they make loans.
Some Hill Democrats and watchdog groups were already on alert after one of the industry’s lead trade associations — the Bank Policy Institute — published a list of deregulatory recommendations in the early days of the pandemic reaching the U.S.
„That really made it difficult to have an open conversation about the full range of measures that ought to be taken here,“ said Graham Steele, director of the Corporations and Society Initiative at the Stanford Graduate School of Business and a former aide to Brown. „It’s made this a hard environment to engage in because there are just concerns that we’re only going to get the deregulatory ideas, we’re not going to get those other pieces that build the system back up.“
But in recent weeks, the nation’s largest banks have embarked on a remarkable PR campaign, touting their financial strength and a willingness to help save an economy that Wall Street nearly destroyed 12 years ago.
It started with a fully televised White House meeting on March 11 where the CEOs of Bank of America, Citigroup and other banking giants pledged to do their part.
They’ve since made joint promises to temporarily stop buying back their own stock to help free up capital — pausing a controversial practice that mainly helps investors — and to tap into emergency Federal Reserve funding to remove the stigma attached to that and encourage other banks to do the same.
„The Covid-19 pandemic is an unprecedented challenge for the world and the global economy, and the largest U.S. banks have an unquestioned ability and commitment to supporting our customers, clients and the nation,“ eight of the country’s biggest banks said via their exclusive trade association, the Financial Services Forum.
Banks are now trying to tap into the emerging goodwill with requests to cut red tape.
Source: politico.com
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