Richard Shelby (Ala.), the ranking Republican on the Senate Banking Committee, warned that many of America’s biggest banks could need further capitalization and additional regulations to stay healthy and avoid another round of taxpayer bailouts.
“Dr. Volcker asked the other question — if they’re too big to fail, are they too big to exist?” Shelby said Wednesday on MSNBC’s “Morning Joe.” “And that’s a good question. And some of them obviously are, and some of them — if they don’t get their house in order — they might not exist. They’re going to have to sell off parts to survive.”
Shelby was asked specifically if Citibank, Bank of America and JP Morgan might at some point be the recipients of further taxpayer bailouts.
“I hope not. I hope it won’t — and I tell you, if we implement a Basel III accord for more capital and they are better regulated, maybe we won’t go down that line,” he said. “But the question I think we’ve got to ask — are we better off with the bigger banks than we were? The [answer] is no.”
The Dodd-Frank Wall Street Reform Act is in the middle of a multiyear rulemaking and implementation stage as its hundreds of regulations are researched and written.
Some Republicans have called for a rollback of the legislation, saying the heightened regulations on financial institutions go too far and will obstruct economic growth.
Shelby also weighed in on the Occupy Wall Street protests, although he stopped short of an endorsement.
“There’s a lot of frustration out there, everywhere,” he said. “They see big salaries at the big banks. I’m sympathetic to unemployment and the failure for this ... administration and everybody to create fewer and fewer jobs, that’s frustration.”
