Thank you to David (Hirschmann) and the Chamber for hosting today’s summit. 

Like my colleagues before me, we support responsible reforms that end ‘too-big-to-fail’ and protect against systemic risk.  Those are two huge deficiencies in our supervisory framework that must be addressed. 

Our particular focus within the context of regulatory reform is on the treatment of large financial institutions.

In order to develop the proper policy response to the financial crisis, we must accurately identify the factors that contributed to the crisis. 

Proposals to preemptively break up large, well-managed, and well-capitalized banking companies, place arbitrary restrictions on growth and activities, or to re-impose Glass-Steagall restrictions, are based on a misdiagnosis of the causes of the financial crisis and are part of this unfortunate anti-large institution narrative. 

To be a global financial leader, the United States needs institutions of all sizes, business models, and areas of expertise. 

Being a global financial leader is an enormous strategic advantage for the U.S. economy and American businesses, workers, savers, and investors – an advantage we should work hard to preserve.

Large institutions provide significant value to customers – in the sheer size of credits they can deliver, in the array of products and services they can provide, and their geographic reach – which smaller institutions simply cannot provide. Boeing, Microsoft, or Coca Cola simply cannot bank at the Silver Spring Credit Union. This unique economic value is particularly important to large, globally active clients and contributes directly to economic growth and job creation.

Large institutions are also far more diversified in their business mix as compared to smaller institutions, which tend to be engaged in fewer business and regions and, therefore, are exposed to greater concentration risk.  In this regard, larger institutions are more stable than smaller institutions.  Rather than being a source of risk, size can mitigate risk.

The problem of “too-big-to-fail” isn’t that some institutions are large, it’s that there is currently no statutory authority to wind down a financial conglomerate in the way that the FDIC is currently authorized to wind down a bank.  More effective systemic supervision, coupled with the authority to seize and wind down large firms, is the appropriate remedy to too-big-to-fail.

Thank you again for the opportunity to participate in this important dialogue and the Forum stands ready to work with Congress to achieve sensible and financial effective regulatory reform.