BLOOMBERG | Regulators Ignoring Dodd-Frank Rules That Allow Them to Break Up Big Banks

Bloomberg Brief (July 27, 2012)

Phil Angelides, president of Riverview Capital Investments and the former chairman of the congressionally appointed Financial Crisis Inquiry Commission, tells Dana Wilkie of Bloomberg that regulators are ignoring Dodd-Frank provisions that give them power to break up the nation’s largest banks.

Q: Why do you want regulators to break up big banks?

A: I have a growing concern about the sheer size of these institutions. I’ve come to the conclusion that they’re too big to fail, too big to manage, too big to regulate, too complex to understand and therefore too risky to exist. In their current form they distort not only the market, but our democracy.

Q: Haven’t Dodd-Frank rules reduced their power and influence?

A: One could argue that the Volcker rule modestly shrinks them because they have to spin off some of their proprietary trading, or that derivatives rules for clearing houses might put a small dent in the oligarchy of a handful of large banks that control the majority of derivatives. But the top 10 U.S. banks still have 77 percent of banking assets – and that’s up from 17 percent in 1970. And look at what regulators did earlier this year – they approved a direct merger of Capital One and ING, which created the fifth-largest financial institution in the U.S. Dodd-Frank was supposed to tie down Gulliver, but I don’t know that that’s possible.

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