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Bankers Say Big Is Beautiful, Safe And Economic

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http://uk.reuters.com/article/2015/01/22/us-banks-breakup-davos-idUKKBN0KV2K920150122

Europe's bankers defended the big bank model this week in Davos as the mounting cost of regulation puts a question mark over its future.

Big complex banks must now hold far more capital than in the past because they are seen as posing higher economic risks and they have to be easier to dismantle if they hit trouble. That has hurt their profitability and held back share prices.

JPMorgan (JPM.N), the biggest U.S. bank by assets, has faced growing pressure to consider a break-up, and similar questions are being put to less profitable European rivals such as Deutsche Bank (DBKGn.DE), Barclays (BARC.L) and Credit Suisse (CSGN.VX).

JPMorgan Chief Executive Jamie Dimon last week said splitting his bank would be bad for the financial prestige of the United States, and he won support from his peers at this week's World Economic Forum in Davos.

"Is there a better model? Those of us who are large have always faced questions." said Douglas Flint, chairman of HSBC (HSBA.L), Europe's biggest bank by market value. "If we were asked the same question (as JPMorgan on breaking up) we would give the same answer."

Pressure has built on JPMorgan since it emerged in December that it could require more than $20 billion of extra capital to meet tougher U.S. rules on big banks.

In fact the big banks are so safe they've needed ZIRP now for 6+ years, QE and huge taxpayer bailouts. Just think how bad it would have been if these banks were risky!!!

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JPMorgan Chief Executive Jamie Dimon last week said splitting his bank would be bad for the financial prestige of the United States, and he won support from his peers at this week's World Economic Forum in Davos

So the "financial prestige" of the US was helped by all the fraud, double dealing, incompetence then the ongoing global economic collapse.

A claim like that can only damage their credibility even more - along with central bankers' credibility.

"Is there a better model? Those of us who are large have always faced questions." said Douglas Flint, chairman of HSBC (HSBA.L), Europe's biggest bank by market value. "If we were asked the same question (as JPMorgan on breaking up) we would give the same answer."

Almost anything but the current model would be worth a try and it couldn't be much worse. Of course there'll be no better model than the current model for those running the current model.

Edited by billybong

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I didn't think the US had any financial prestige.

Are these people completely insane?

No, they are paid handsomely to put the case forward that Al Capone and his gang were benevolent friends and much maligned by hateful press articles.

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The are safe - for the bankers. Make sure you are too big to fail and you will not.

Why a country and its general populace would want a big (>10% GDP) is another thing.

Change the rules to make all banks have assets less than 5% GDP.

Make all investment banks (non-retail) banks/financial companies unlimited liability partnerships.

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No, they are paid handsomely to put the case forward that Al Capone and his gang were benevolent friends and much maligned by hateful press articles.

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