Kenneth C. Griffin Quotes

Fannie Mae may have conformed to the rules but the rules didn’t conform to reality. A major bank or financial institution could meet every single regulatory requirement yet still be at the risk of collapse.

I have been working hard trying to implement Dodd-Frank reforms. We went through a terrible crisis in 2008. Many people lost their homes.

I think we're fooling ourselves if we think that regulators are going to be able to outsmart the bankers. So, the task of designing regulatory reform is trying to make more or less foolproof regulation and that's one of the advantages of the systemic category.

American business would be run better today if there was more alignment between CEOs' interest and the company. For example, would the financial crisis of 2008 have occurred if the CEO of Lehman and Morgan Stanley and Goldman and Citibank had to take a very small percentage of every mortgage-backed security... or every loan they made?

There is no evidence that more regulation makes things better. The most highly regulated industry in America is commercial banking, and that didn't save those institutions from making terrible decisions.

If we are really serious about preventing another crisis like the 2008 meltdown, we should simply ban complex financial instruments unless they can be unambiguously shown to benefit society in the long run.

If anything, the bailouts actually hindered lending, as banks became more like house pets that grow fat and lazy on two guaranteed meals a day than wild animals that have to go out into the jungle and hunt for opportunities in order to eat.

The thought for a long time was that banks needed to be too controlled, too regulated to be turned over to the Wild West of the Net. Then the credit meltdown hit, and we saw just how reckless these so-called safe and regulated institutions were.

It is probably the case that some regulation of financing will make crises less likely, and I would say higher capital requirements are an almost fail-safe way to make banks safer. But there are a lot of other things that may not be doing that, and so we need to be careful about sort of, like, rushing to one conclusion or another.

This crisis exposed very significant problems in the financial systems of the United States and some other major economies. Innovation got too far out in front of the knowledge of risk.

I've been telling anyone willing to listen that banks have a tendency to sit on time bombs while convincing themselves that they are conservative and nonvolatile.

Raising minimum capital requirements [for banks] is expensive. But it is safe.

What we have to find is the right level of regulation of our financial system so that it has the incentive to invest in things, but at the same time, it is sufficiently regulated so it can't get in the kind of trouble that we have seen in the past and we have seen recently.

Proprietary trading does not belong in banks with FDIC insurance.

Limiting the destructive risk-taking by large financial firms and banks which are 'too big to fail' is needed.

Separating out banks and investment banks right now under Glass-Steagall would have very big implications to the liquidity and the capital markets and banks being able to perform necessary lending.

We must learn the lessons of the 2008 crash: no company should be able to become too big to fail.

The financial crisis was linked to the fact that banks had excessive leverage and too many risky assets. The solution is not to try to dictate to banks what they can do or not do, but to require them to strengthen their capital to absorb potential losses and hold less risky assets.

Dodd-Frank and independent actions of banks go a long way in terms of progress on capital, liquidity, transparency, "living wills" (plans for winding down a bank in the event of a collapse) and resolutions.

With government deregulation and the triumph of financial liberalization, the dangers of systemic risks, the possibility of a financial tsunami, sharply increased.

The banks, because of mismanagement, because of huge risk taking, are now in very vulnerable positions. We can expect that we're gonna have to do more to shore up the financial system. We also are gonna have to make sure that we set up financial regulations so that not only does this never happen again, but you start having some sort of - trust in how the credit markets work again.

If we are really serious about preventing another crisis like the 2008 meltdown we should simply ban complex financial instruments, unless they can be unambiguously shown to benefit society in the long run. This is what we do all the time with other products-drugs, cars, electrical products and many others.

Why is it possible to rescue S&L buccaneers in the early '90s and provide guidance to levered Wall Street investment bankers during the 1998 long-term capital management crisis, yet throw 2 million homeowners to the wolves in 2007?

The idea that it's smart to allow Wall Street firms, with this "too big to fail" imprimatur, to become hedge funds again - it's unconscionable. You're essentially saying we're going to take some elites in our society and let them roll the bones in the marketplace, and if it works out they get rich, and if it doesn't work out the taxpayer comes in again. That seems absolutely crazy to me. That seems to be where they're headed. I mean, maybe they're not and I'm wrong. Maybe they'll do sensible things. It's hard to know! There doesn't seem to be a plan.

If bankers become overly conservative in response to past lending mistakes - or if examiners force such behavior - it will hurt bankers' own long-term interests and the economy in general.