July 29, 2016
Financial Regulators Have a Choice: Complain About Wall Street Recklessness or Do Something About It
Statement of Bartlett Naylor, Financial Policy Advocate for Public Citizen’s Congress Watch Division
Note: Wall Street regulators are sounding the alarm about the return of risky lending. A recent review – conducted by the Federal Reserve, the U.S. Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp – found increasing levels of risk in leveraged loans to highly indebted companies, such as those bought by private-equity firms and oil and gas portfolios.
Has there ever been an industry as tone deaf as Wall Street? The same month that the two major political parties called for the restoration of Glass-Steagall in their presidential platforms, bankers are returning to some of the same risky business practices that crashed the global economy in 2008 and caused the Great Recession.
Financial regulators need to do more than simply fret. They need to shut down Wall Street’s dangerous and reckless practices before those practices trigger another spectacular meltdown. The warning signs couldn’t be any clearer. Regulators must act now.