CONTACT: Brigid Richelieu
(202) 660-2569
brichelieu@fsforum.com
Washington, D.C. – Industry leaders, policy experts, and government officials gathered Tuesday for the Financial Services Forum Summit, featuring discussions on American competitiveness, capital and the economy, migration of risk in the financial sector, and innovation inside banks.
Click below to see key moments from each panel. Full recordings are available here.
A Conversation with Secretary Gina Raimondo
In a wide-ranging conversation with State Street Chairman and CEO Ron O’Hanley, Commerce Secretary Gina Raimondo talked about American competitiveness, stating: “Our capital markets, our entrepreneurs, our innovation [are] the envy of the world. That allows us to compete.” Secretary Raimondo also discussed her recent visit to China, calling the conversations between U.S. and Chinese officials “candid,” but she noted that U.S. companies still are concerned with investing in China: “I don’t know if we will solve any problems by talking. I do know we won’t if we don’t talk.”
Capital and the State of the Economy
Former Fed Vice Chair for Supervision Randal Quarles, American Action Forum’s Doug Holtz-Eakin, and Goldman Sachs’s Sheara Fredman discussed the strength of capital at the largest U.S. banks and raised concerns regarding the economic impact of increasing capital requirements. “The system is at an optimal level of capital now, and materially increasing the level of capital in the system will result in a cost to economic dynamism,” Quarles said.
Migration of Risk Within the Financial Sector
In a discussion on nonbank financial institutions and the migration of risk within the financial sector, panelists Richard Berner from New York University, Hilary Allen from American University, and Karen Petrou from Federal Financial Analytics, Inc. discussed how increasing capital requirements will accelerate the movement of risk outside of the banking sector and discussed supervisory needs of nonbank financial institutions. “We need a big rethink about the way institutions that aren’t banks, but which engage in activities that might cause risks, are overseen and supervised,” Berner said. “If we identify risk that is similar, we ought to have the same supervisory outcome for managing those risks.” Petrou noted that increasing bank requirements while knowing it will lead to a movement of risk to less regulated firms, is “a very significant dereliction of long-term duty.” Of the migration, she said, “bit by bit, it’s changing the basic business of banking and the model as a whole.”
Innovation Inside Large Banks
JPMorgan Chase’s Aaron Iovine, State Street’s Justin McCormack, and Goldman Sachs’s Lee Brenner discussed the innovations that are reshaping the banking landscape and how these advances interact within the current regulatory framework in a conversation moderated by Davis Polk’s David Portilla. “There’s an underlying theme to how financial institutions look at innovation as a whole, and that is risk management,” said Iovine.
The Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, deep and liquid capital markets, a competitive global marketplace, and a sound financial system.
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