Rodge Cohen Quoted in American Banker ArticleSeptember 22, 2011
Mr. Cohen was quoted in a September 22 American Banker article titled, “Once Again, ‘Too Big to Fail’ Has Become a Hot Subject,” which examined the debate surrounding the question of whether “too big to fail” is still relevant in the financial services industry. The debate was triggered at the American Banker’s Regulatory Symposium in response to Moody’s Investor Services downgrading the long-term rating of Bank of America Corp. and Wells Fargo & Co. and the short-term rating of Citigroup, Inc., due to the increased possibility that the government would let the companies fail. As noted in the article, when a community banking group attempted to block the merger of Capital One Financial Corp. and ING Direct USA, a company that would be worth more than $100 billion of assets, partly out of fear that regulators were not yet prepared to deal with such a large company, the disagreements continued. Mr. Cohen supported that Congress has done as much as possible to ensure the government could not bail out large firms again. Mr. Cohen commented, “I would argue that Dodd-Frank has largely eliminated ‘too big to fail’ for major U.S. banks, perhaps even totally.” Rodge noted the various new regulations being put in place including more power for Federal Deposit Insurance Corp. in addition to high capital and liquidity standards.
The article noted Mr. Cohen’s support of “free markets and [he] argued there was no reason to ban mergers above a certain level, saying Dodd-Frank gives regulators the power to properly supervise large institutions.” Mr. Cohen expressed his disapproval of a moratorium, saying regulators should let new rules work before “immediately slapping on a moratorium.” Mr. Cohen also asked, “Why would you possibly want to do that except to deprive the shareholders of the $500 million bank of the best possible price?”