CEOs of big banks tell House Democrats industry is stable

CEOs of big banks tell House Democrats industry is stable

Questions largely focused less on systemic risks and more on social issues like how banks are addressing wealth inequality by adjusting overdraft fees in checking accounts, and whether banks are extending loans to businesses that need them.

Unlike the remainder of the bank leaders appearing before Financial Services Committee, JPMorgan Chase boss Jamie Dimon appeared before Congress many times prior to and following the financial crisis.

Since the 2008 collapse, the country's most notable banks have injected more than $800 billion in cash to reinforce the financial system.

"There is no doubt that the strength, stability and resiliency of the financial system has been fundamentally improved over the course of the last ten years", Dimon said.

Chief executives of some of the largest US banks appeared before Congress on Wednesday, giving lawmakers their first opportunity to grill the lenders since the 2007-2009 financial crisis.

US banks have added more than $800 billion in aggregate capital to help shore up the financial system.

"I'm concerned that several of these [banks] are simply too big to manage", US Rep. Maxine Waters, the chair of the House Financial Services Committee, said during her opening statement.

The hearing had some policy questions, but many members of Congress took their time to ask politically-charged questions of the CEOs, on topics ranging from gun regulations to executive compensation to climate change. Citi and Bank of America past year said they would no longer provide certain banking services to gun manufacturers.

The titans of Wall Street got hauled onto Capitol Hill on Wednesday to get grilled on whether their "too big to fail" banks could cripple the U.S. economy.

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Another threat mentioned was "shadow banks", which is a term used to describe non-bank companies getting into financial products, particularly financial technology companies.

CEO Jamie Dimon came under intense questioning on Wednesday over the bank's relationships with gunmakers, and was asked if he'd consider implementing a formal policy limiting that business - as some of his peers have.

Representative Sean Duffy of Wisconsin was among the Republicans who balked at a retreat by major banks from financing gun makers, rebuking Bank of America's Brian Moynihan, who said the bank restricted financing of gun companies because of employees who had been personally affected by shootings.

Also due to appear are Ronald O'Hanley, CEO of State Street Corp, and Charles Scharf, CEO of Bank of New York Mellon Corp, the country's two largest custody banks.

Another executive who isn't in attendance at the hearing is Tim Sloan, who abruptly resigned from Wells Fargo last week, just days after a separate appearance before Congress.

The hearing comes after the banking industry had a record year for profits in 2018, thanks to the tax cuts passed by Republicans in late 2017. "You did well with deregulation with the last Congress", she said, cautioning banks not to push too hard and overwhelm the panel with further suggestions on easing rules, or to seek relief directly from regulators. Banks are also now subject to annual stress tests and must get their capital return plans approved by the Federal Reserve.

"Dodd-Frank has not done anything bad to your bottom line" Waters said, referring to the Dodd-Frank Act, the law passed after the financial crisis to reorganize the banking system.

And in a note to how long the hearing lasted - almost seven hours - Waters said she would bring the CEOs back to testify next year, in smaller groups.

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