KBW's Tom Michaud Sees A Main Street Banking Boom As Investors Tire On Too Big To Fail

Forbes ^ | 18 January 2016 | Antoine Gara

[Lorianne]

Thomas B. Michaud, CEO of Keefe, Bruyette & Woods, is the consummate banker. His glass-walled midtown office looks out onto a 100-person sales and trading floor and his desk is filled with deal plaques and analyst reports, the by-product of his firm’s banking and research presence in the financial sector, where it covers some 633 firms across the banks, insurance, asset managers and exchanges.

But midway through a half-hour conversation, Michaud begins to sound as if he’s an organizer of the Bernie Sanders campaign, not a CEO who’s contributed thousands to Jeb Bush’s Right To Rise PAC, and sees a lot of sense in (R-Ala.) Richard Shelby’s effort to give lenders relief from the Dodd Frank Act.

“JPMorgan Chase is a trillion dollars bigger after the crisis than it was before the crisis. That’s almost unfathomable. You’ve got these big banks that were too-big-to-fail and their response was to get bigger,” Michaud says.

He collects his thoughts and then lobs another bomb at the titans atop his industry. “My opinion is when you have a few big banks that dominate the market like they do, it can be anti-competitive. What we learned in the crisis is that the government will bail out the biggest banks… Not only is it dangerous to the tax payer, it is dangerous to the global economy,” he says.

[taxcontrol]

I over heard a comment that I thought was an interesting view. I don’t know who the speaker was or their background. His comment was that there was a time when “too big to fail” was met with anti-trust actions instead of bail out.

I thought that was a rather interesting perspective. Not sure I agree with the underlying or implied sentiment but still, that is what a lot of voters are feeling.

[major-pelham]

Can’t happen - the regulators run the banks and bankers just do what they’re told to do, only business the government buro’s approve of. Pretty hard to get innovation in that environment.

[Lurkinanloomin]

They should have been allowed to fail.
No bailouts.