John Redwood Quotes

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.

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.

There are elements of Dodd-Frank that clearly need to be curtailed.

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.

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.

Without a doubt, we do support a robust framework for aggregate capital and liquidity and stress-testing.

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.

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.

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

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.

Regulation is necessary, particularly in a sector, like the banking sector, which exposes countries and people to a risk.

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.

Among other objectives, liquidity guidelines must take into account the risks that inadequate liquidity planning by major financial firms pose for the broader financial system, and they must ensure that these firms do not become excessively reliant on liquidity support from the central bank.

Governments need to be authorized to provide 'open bank assistance.' The convolutions of Dodd-Frank aimed at 'avoiding' this tactic are ludicrous and will prove to be extremely costly to the system.

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.

Our overriding goal in restructuring our financial architecture should be that taxpayers never again have to save a failing financial institution.

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

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.

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

I mean, everyone agrees with stress tests for banks. I mean that's clear. But banks should do that on their own. And they should worry about their own capital functioning. That's what they should do. It shouldn't be a government function.

Financial crises require governments.

I would argue that no financial instrument counted as regulatory capital should be allowed to receive any protection from losses.

Banking, I would argue, is the most heavily regulated industry in the world. Regulations don't solve things. Supervision solves things.