Tags: Bove | bank | US | crisis

Dick Bove: Hatred of Big Banks Guarantees Another Financial Crisis

By    |   Monday, 23 December 2013 11:50 AM

Blinded by its hatred for big banks, the government is weakening the U.S. financial system and guaranteeing another financial crisis, argues eminent banking analyst Dick Bove in his a new book, "Guardians of Prosperity."

Blaming big banks for the financial crisis, the United States is seeking "financial isolationism" and fleeing from the rest of the world, Bove warns in a commentary for CNBC.

"The government is hampering the activities of the most successful banking companies in the United States and facilitating growth of financial companies in the non-regulated part of the system," writes Bove, an equity research analyst at Rafferty Capital Markets. "The government is driving the system to rely on its least stable companies. It is driving risk through the system."

Editor’s Note:
Obama’s Budget Takes Aim at Retired Americans

While the United States shrinks its banks, banks in most other countries are growing, taking market share away from American banks, he notes.

Of the nine largest banks in North America by asset size, five are based in Toronto, which may now have more bank assets than New York. The Industrial and Commercial Bank of China, now the largest bank in the world, will make more money this year than the two largest profitable U.S. banks combined, Bove argues.

U.S. corporations will have to turn to foreign banks for financing, but those banks will favor foreign companies, he adds. The U.S. dollar will lose its position as the global reserve currency, increasing the cost of commodities and forcing the United States to pay down its debt.

Instead of impacting banks, new government rules have hurt the public, he says. For instance, requiring banks to hold more capital has meant few loans.

Although politicians and the media blame big banks for the financial crisis, they were not the only players in the financial collapse and not its root cause, Bove contends.

"To argue that bankers were the cause of this collapse is unusually short-sighted but it is what the government and media have done and the American public has accepted this explanation," he states.

Bove is taking a contrarian position by supporting the mega-banks.

"It seems to me like he's [Bove] fighting an uphill battle" in his book, Thomas Cooley, former dean of New York University's Stern School of Business, tells Bloomberg Businessweek

"Probably [JPMorgan Chase CEO] Jamie Dimon will give it to everyone on his Christmas list."

Editor’s Note: Obama’s Budget Takes Aim at Retired Americans

Related Stories:

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Economy
Blinded by its hatred for big banks, the government is weakening the U.S. financial system and guaranteeing another financial crisis, argues eminent banking analyst Dick Bove in his a new book, "Guardians of Prosperity."
Bove,bank,US,crisis
426
2013-50-23
Monday, 23 December 2013 11:50 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved