Arthur Laffer Quotes

The investment banks should either choose to be regulated as banks or should arrange to conduct their affairs to not require the stop-gap support of the Federal Reserve.

The Federal Reserve has a responsibility to ensure the safety and soundness of financial institutions and to contain systemic risks in financial markets.

The Federal Reserve has always recognized the importance of allowing markets to work, and government oversight of financial firms will never be fully effective without the aid of strong market discipline.

In the future, financial firms of any type whose failure would pose a systemic risk must accept especially close regulatory scrutiny of their risk-taking.

Strong banks want strong regulation.

I do believe that banks are special - they are very leveraged institutions by nature; therefore, it's even more critical to ensure that the governance and the process of running a banking company are well-organised, managed and regulated.

Banks are concerned the central bank is imposing too many regulations. If the trend continues, we'll swing to heavy regulation. We need to have balanced regulation to encourage the economy.

For market discipline to constrain risk effectively, financial institutions must be allowed to fail. Under optimal financial regulatory and financial system infrastructures, such a failure would not threaten the overall system.

The Obama administration's plan is to have the Federal Reserve regulate banks that might pose a 'systemic risk' if they were to fail.

It is no wonder that bank capital is regulated. When borrowing and lending is profitable, it is tempting for banks to scale up their operations and to borrow and lend too much in relation to their capital, in effect reducing the effectiveness of the potential capital cushion.

You shouldn't be trying to create a system where no bank fails, but you should be creating one that catches a bank and allows it to fail without impacting the financial markets.

A contingent bailout policy - implicit or explicit - must be coupled with some regulation of what banks can and cannot do. For example, a ban on lending to uncreditworthy customers might well make sense.

If a bank's too big so that it can't fail without hurting our economy, well then, it's too big.

If credit unions can grow and prosper with a 15 percent cap, so can banks.

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.

What the study I chaired actually said was we needed tougher regulation of cash and capital in banks, as credit was too easy. Events proved that right.

You have safety and soundness as primary purpose of the Federal Reserve, the OCC, and the other agencies which control banking regulation.

The Commission concludes that the banking supervisors failed to adequately and proactively identify and police the weaknesses of the banks and thrifts or their poor corporate governance and risk management, often maintaining satisfactory ratings on institutions until just before their collapse. This failure was caused by many factors, including beliefs that regulation was unduly burdensome, that financial institutions were capable of self-regulation, and that regulators should not interfere with activities reported as profitable.

No significant deregulation of financial institutions occurred in the last 30 years.

I had made a mistake in presuming that the self interests of the organizations of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.

It is wrong when we, in effect, throw safe and sound financial institutions into the same category with banks and lenders that climbed too far out on a limb with no way to return.

Large financial institutions in this country will always play a role that is essential to our economic growth. But they must only be permitted to grow and interconnect, throughout our economy, under careful oversight and with a mechanism for allowing those connections to be broken safely.

We need sobriety, rationality, and civility in the discussions on the regulation of financial institutions so that the banks can return in a robust manner to their central role in funding the economy.

Banks should decide on dividend increases and share buybacks after receiving the results of stress tests, when they know how much capital regulators wish them to hold.

Proprietary trading does not belong in banks with FDIC insurance.