Why do Big Banks Love Big Government So Much?

December 13, 2016 By E.J. Smith - Your Survival Guy

Despite the opportunity to repeal the Dodd-Frank financial laws that have plagued the banking industry since their passage, big banks are reluctant to support such a move. It turns out, big government is great for preventing new competition from emerging, and with barriers to entry so high, the big entrenched banks see more risk to their business from repealing Dodd-Frank than from keeping it. The Wall Street Journal writes:

J.P. Morgan’s Jamie Dimon and Lloyd Blankfein of Goldman Sachs have urged against repeal, and other bank CEOs are also suggesting policy small-ball rather than wholesale reform. Mr. Blankfein, who will have former colleagues as senior policy makers in the Trump Administration, in particular is in a position to encourage significant change.

But last year he explained why that’s not necessarily in Goldman’s interest. After describing how regulatory costs have helped raise the barriers to entry in his business “higher than at any other time in modern history,” Mr. Blankfein forecast more opportunities for global giants like Goldman to gain market share, as “only a handful of players” will likely be able “to effectively compete on a global basis.”

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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