Commend Proposed Regulation of Big Banks


Target: Martin J. Gruenberg, Chairman of the Federal Deposit Insurance Corporation

Goal: Commend new regulations that aim to prevent bank failures and taxpayer bailouts

The Federal Deposit Insurance Corporation, along with the Federal Reserve and the Office of the Comptroller of the Currency, have introduced regulations that require banks to hold much more capital than is currently mandated under international agreements. The purpose of these new rules is to strengthen the biggest banks’ ability to absorb losses, so as to reduce the risk of failure and a subsequent taxpayer bailout. Please voice your support of these new regulations that aim to prevent billion dollar bailouts for banks.

The proposed regulations are a significant shift in the political mentality that banks are too big to fail, and too complex to regulate. Bolstering big banks’ immediate capital would help simplify the system. “This will increase the overall financial stability of the system,” Vice Chairman of the Federal Deposit Insurance Corporation, Thomas M. Hoenig, said. “This is an advantage to the banks over the long run, and to the economy. I am confident of that.”

However, capital increases are not enough to prevent taxpayer bailouts altogether. Higher capital may lead to the nation’s biggest banks to become even bigger, given the complex interconnections that exist between banks that enable them to borrow from each other at lower interest rates than smaller banks are capable of. So while these new requirements are progressive, they are only the initial step in the regulatory process to ensure bank stability. Commend these proposed regulations in the hopes that more rules will be passed to reduce the risk of more taxpayer relief to big banks.


Dear Chairman Martin J. Gruenberg,

Thanks to the Federal Deposit Insurance Corporation and other bank regulators, new rules aimed at preventing the need for another taxpayer bailout of big banks are finally being pushed forward. With banks making staunch profits, these so-called too big to fail institutions can now afford to increase the amount of capital they hold should another failure ever occur. More capital would act as a buffer to any sudden losses, working to protect public funds from covering the losses.

If implemented, these new capital requirements would help shield taxpayers from another billion-dollar bailout. With bolstered capital, banks and their executives should view these proposed changes as restorative, not only to their overall security, but to their public image as institutions in which people can place their confidence.

I urge the Federal Deposit Insurance Corporation, as well as the Federal Reserve and the Office of the Comptroller of the Currency, to remain committed to the passage of these rules that forestall another collapse of this country’s financial system. This will hopefully only be the beginning of the process to diminish the “big”-ness and complexity of banks.


[Your Name Here]

Photo Credit: lewisha1990 via Flickr

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One Comment

  1. I think England owns the biggest banks in the USA. I would not trust them.

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