Thursday, May 14, 2015

Post Financial Crisis Regulation Led To Higher Bank Capital, Fewer New Banks And More Loan Rejections For Marginal Borrowers

From The Wall Street Journal, "Missing in Financial Rules Debate: Hard Numbers: Without studying the economics of new regulations, the rewards and risks remain an unknown" by Greg Ip:
The problem is no one knows the true costs or benefits of the blizzard of laws, rules and penalties imposed since the financial crisis.

Four years ago, J.P. Morgan Chase Chief Executive James Dimon asked Ben Bernanke, then the Federal Reserve chairman, whether anyone had tallied their cumulative impact on lending and growth. The answer, apparently, was no, and that seems still to be the case.

Unlike with rules governing pollution and automobile safety, the costs and benefits of big new financial rules are seldom rigorously quantified. That’s a problem, because a proper accounting of financial regulations could show there are more-effective and cheaper ways to protect consumers and prevent crises.
Source: The Wall Street Journal

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