The True Winners and Losers of Financial Regulation: Remarks at the New York League of Independent Bankers

Earlier this month, I had the pleasure of delivering some remarks to the New York League of Independent Bankers. I spoke about how and why financial regulation often has consequences that are very different from the ones that policymakers intend. What follows are my written remarks — I hope you enjoy reading them.Finding myself in New York before a group of community bankers, I cannot help but think of George Bailey, the lead character in the 1946 movieIt ’s A Wonderful Life.Bailey is of course the manager of Bailey Bros. ’ Building and Loan, the local bank in Bedford Falls, New York. He’s also the very picture of the upstanding community banker: generous, altruistic, and always ready to sacrifice himself for his family and neighbors. When Bailey falls on hard times and is contemplating suicide, his guardian ange l can show him multiple examples of how the world would be a worse place without him.For decades, that movie shaped popular perceptions of the good that banking can do. It offered a welcome contrast to the all-too-common stereotype of banking as a business of questionable social value, altogether separate from “the real economy.” The people in this room scarcely need reminding that, were it not for allthe services that banks provide at a comparatively low cost — diversification, payments, safekeeping, the transfer of funds across time and place, and more — life would be harder, less secure, and less comfortable.Structural changes in the U.S. banking l...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs