Financial Groups’ Merger Forges New Bank Policy Institute
The Bank Policy Institute, a new major trade group for the banking industry, came to life through the high-profile merger of the Clearing House Association and the Financial Services Roundtable earlier this year. The new group will share the DNA of the two groups that preceded it.
The banking industry is taking a new approach to Washington—with the completed merger of two major financial trade groups providing the perfect opportunity for a change.
The Bank Policy Institute (BPI), publicly revealed for the first time on Monday, represents something of a reframing of the efforts of the Clearing House Association and the Financial Services Roundtable, two large industry groups that focused on different aspects of the financial sector until their merger was announced earlier this year.
The new group combines the respective organizations’ focuses (TCH Association’s emphasis on research, FSR’s on advocacy) into a single mission. In a note on the institute’s website, BPI CEO Greg Baer, who formerly led TCH Association, laid out the policy goals as such:
Our focus will be prudential regulation of banking, and how it affects not only safety and soundness and financial stability but also innovation and credit availability. The stakes are high, as our members make 72 percent of all loans and 44 percent of the nation’s small-business loans. These banks, which include foreign banks operating in the United States, also play a major role in the nation’s capital markets, which fund a majority of U.S. commerce.
He further went on to discuss a series of secondary goals for the organization, including a response to growing regulation by the Federal Reserve and the desire to attract more Americans with lower and moderate incomes to banking accounts.
According to the Wall Street Journal [subscription], the new trade group represents 48 of the country’s largest banks. The newspaper noted that, from a policy standpoint, BPI is less focused on wide-scale deregulation, such as a full-scale repeal of the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act, and instead is focused on smaller reforms that would be beneficial to small and medium banks.
“Post-crisis regulation wasn’t built in a day,” Baer told the newspaper. “I don’t think a thoughtful reconsideration of it can take place in a day.”
The move to launch BPI has been closely watched in the financial sector in recent weeks, with particular attention being put on the fact that the organization, with more of a focus on traditional banking, had left three major financial companies on the sidelines: Goldman Sachs Group Inc., Morgan Stanley, and Credit Suisse Group AG.
PNC Financial Services Group CEO William Demchak, an organizer of BPI, explained to Bloomberg last month that the three companies, which largely focus on investment banking, would be allowed to join the group later if they were interested in traditional banking concerns.
Per an emailed news release, BPI will have a wide array of disciplines covered on its staff, including attorneys, economists, financial analysts, researchers, and technologists.
“All of BPI’s work will rest on a foundation of research and analysis,” Baer emphasized. “We will demonstrate that America’s leading banks are extraordinarily resilient and that the right balance of policies and regulations must be maintained to help ensure they continue to play their important role in helping drive economic growth.”
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