“Rodgin Cohen Discusses Risks to the Banking System, Suggests Regulatory Changes” (SNL Financial)

September 10, 2009

SULLIVAN & CROMWELL LLP Chairman Rodge Cohen was featured in the September 10 SNL Financial article, “Rodgin Cohen Discusses Risks to the Banking System, Suggests Regulatory Changes,” and was later interviewed in a September 14 piece, “SNL Q&A with S&C Chairman Rodge Cohen.” The first article summarized Mr. Cohen’s address at the September 9 Rodman & Renshaw LLC investor conference in New York, in which he discussed the immediate and long-term risks facing banks. “The principal, immediate threat to the banking system is the likelihood of a sharply elevated failure rate among smaller banks, equating to several hundred bank failures occurring in a relatively short period of time,” Mr. Cohen said. In looking to the future, he suggested an “enhanced and more enlightened” approach to using TARP funds for smaller banks. For the long term, however, Mr. Cohen noted that changes to the system are essential in terms of prevention, as the industry may not be as fortunate in the next downturn. “We shouldn't wait until congressional committees identify the problems and move quickly with legislation.” In the Q&A, Mr. Cohen discussed issues effecting the banking system, including distribution of TARP funds, the U.S. Treasury Department’s proposal to increase capital markets requirements and the possibility of the FDIC providing open bank assistance.