Banks brace for more tough regulation from Obama
by Brian Bandell,
President Barack Obama’s re-election, coupled with the Democrats retaining control of the U.S. Senate, means banks and the financial services industry can expect the administration’s regulatory crackdown to continue.
Republican presidential candidate Mitt Romney vowed to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act, but that likely will not happen in the next four years. Instead, the regulatory agencies will write the new rules governing banks and financial services under the vision of Obama.
The administration’s focus on tax disclosure for foreign accounts will continue as well.
“I hope regulation doesn’t escalate to yet another level to where it hinders the business of banking,” said Patricio Perez, a partner and southeast leader of financial institutions accounting for McGladrey in Miami. “It’s difficult to come up with different sources of revenue. The margins are contracting. People say the economy is turning around, and that may be true, but it hasn’t reached a full recovery yet. If the Obama administration puts forth additional regulations, it would be catastrophic for the industry.”
Perez is worried that community banks would be required to conduct enterprise risk management, which is a process where banks see how they would perform in a bad economy or with big swings in interest rates. Large banks underwent a similar process as part of a so-called stress test.
The increased cost of regulation is already hampering many small banks, said Perez, who works with more than 40 banks in Florida. They must hire additional staff to pay for training, but there are not new sources of revenue to make up for that, he said.
No comments:
Post a Comment
Your comments are important for me.. i will Reply to them shortly..
Gracias por comentar y responder a ellos pronto..
JR