Split investment and commercial banking, Frost Bank chief says
Cullen/Frost Bankers CEO Dick Evans, in Fort Worth Wednesday for a client luncheon, said lawmakers should restore the strict division of investment banking and commercial banks, which Congress abandoned in 1999 and which many blame for the severity of the financial crisis. U.S. taxpayers should not be on the hook for outsize losses incurred by bad bets at investment banks, he told a packed house at the Fort Worth Club. Evans also rejected the "too big to fail" doctrine applied to the very largest banking corporations, saying it short-circuits the discipline imposed by a free market. As chief at Frost Bank, Evans is more qualified to comment on prudent banking practices than most. Among Texas' 10 largest banks, Frost was the only institution that did not fail or be acquired in the 1980s after plunging oil prices shredded the Texas economy. Evans also said he agrees with Dallas Federal Reserve Bank Chairman Richard Fisher that there is little the central bank can do to further stimulate the U.S. economy, and policymakers should instead focus on reducing unproductive regulation.
-- Jim Fuquay