Rasmussen Poll: Most Americans Prefer Less Banking Regs, More Competition

Tuesday, 27 Nov 2012 07:56 AM

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Most Americans prefer less banking regulations and more competition, a new Rasmussen Reports survey finds.

The telephone survey of 1,000 likely U.S. voters found that 53 percent believe more competition and less regulation is better for the financial industry than more regulation and less competition is.

About one in three took the opposing view and stated that more regulation is needed, and 15 percent were undecided.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

“While voter opposition to the government bailouts of Wall Street has softened a bit, a majority still thinks the U.S. financial system should be opened to more competition,” Rasmussen stated.

“Voters for years have favored more competition and less regulation of various sectors of the economy. Two years ago, when President Obama created the government agency to regulate lending practices, 51 percent say increased competition is more effective protection for consumers than more regulation.”

The report comes in wake of highly publicized complaints that banks have become too big to fail and threaten the stability of the country’s financial sector.

Calls have risen to break up big banks in recent years, including from Sandy Weill, former chairman and CEO of Citigroup and architect of today’s large institutions that run investment and commercial banking institutions under one roof.

Too much leverage and not enough transparency make such a move necessary.

“I think what we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not going to be too big to fail,” Weill told CNBC in July, surprising the financial community.

“They would be entities on their own like they were 25 years ago.”

The repeal of the Glass-Steagall Act in the 1990s allowed big financial institutions to provide both investment banking and commercial banking services.

However, Federal Reserve officials say regulations protect the financial system without having to break up big banks.

Bank of all sizes are dealing with increasing regulations in wake of the financial crisis, especially those outlined under the Dodd-Frank financial reform law, which gives regulators greater say-so on bank capital requirements, liquidity levels and risk-management practices and would also ban banks from trading their own money for profit in capital markets.

Such regulations arguably prevent repeat performances of past crises but in the meantime, banks will spend more time worried about compliance and less time lending, critics say.

Have patience, says one high-ranking Fed official.

“Too big to fail is an unacceptable regime. The good news is there are many efforts under way to address this problem. The bad news is that some of these efforts are just in their nascent stages,” William Dudley, president of the Federal Reserve Bank of New York, told a recent conference of finance professionals in New York City, according to prepared remarks of his speech.

“It is important that as the crisis recedes in memory, that these efforts not flag — this is a project that needs to be seen to a successful conclusion and then sustained on a permanent basis.”

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

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