The Sarbanes-Oxley Act, passed in 2002, has made U.S. banks as strong as they've ever been, says Chad Brownstein, Banc of California's vice chairman and lead independent director.
"Now they're in a position to continue to manage through any moral issues that may come up," Brownstein told J.D. Hayworth and Miranda Khan on "America's Forum" on Newsmax TV
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Sarbanes-Oxley was passed after the Enron and WorldCom accounting fraud scandals, and was designed to prevent future accounting fraud. It requires that financial reports be certified by senior management, and requires internal controls on the reporting methods used by companies and financial institutions.
"The United States has done a great job the past five years reconciling the problems that occurred with the banks that went through the crisis," Brownstein said. "I believe this banking system in the United States is as strong as it's ever been."
The European Central Bank has been conducting stress tests on European banks, and those results are supposed to be released on Sunday. According to media reports, at least 11 banks failed the stress test, but some banks have said those reports are not accurate, CNBC
The vice chairman contends that because U.S. banks are so strong, they can get by even if the European banks are struggling. However, it could take a toll on the U.S. economy.
"We have a trading partner that's not as strong as it used to be, so from the export standpoint it may be tough on the United States," he said.
However, he added that "we're not as tight globally as we have been in the past with European banks."
"Having a tough economy in Europe and a banking crisis there, it's certainly not the best thing that could happen for our economy, but ultimately we've done a good job in the last decade of reigning in our own issues," Brownstein said.
"We'd be able to withstand any of the European problems," he said. "But certainly we want them to stay as strong as they could."
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