"View From the Top"

Financial Times - July 3, 2009

The Financial Times web site featured a video interview with SULLIVAN & CROMWELL LLP Chairman H. Rodgin Cohen on his views on proposed U.S. banking reform and the origins of the financial crisis. When asked if we are at the beginning of an economic recovery, Mr. Cohen said, "We have stopped the freefall. We have put up a lot of protections to make sure we don't decline further. It's hard to say exactly when we're going to reach bottom, and maybe we've reached it, but I don't think we're far from it." Mr. Cohen noted that M&A deals are starting to come back but "there's still a lot of fear out there in the financial services industry. There are artificial barriers to M&A, which continue to have a negative impact on activity. M&A is two-thirds economics and one-third psychological. When people feel good about themselves, they do deals." When asked about his big worries for the economy right now, Mr. Cohen said, "The focus has been predominantly on the very largest financial institutions, but we have another 9,000 banks that are now going to experience the ravages of loan losses. We've got to make sure those banks are capable of dealing with this. Some of the focus in programs needs to be shifted so that we don't have a lot of bank failures among the smaller banks. If you have enough, they can begin to have a very widespread impact."