Tags: Bove | New York | regulators | banks

Bove: New York Regulators Driving Banks Out of State

By    |   Wednesday, 12 February 2014 08:48 AM

New York regulators are doing their best to push major banks out of the state by filing multiple lawsuits against them, says bank analyst Richard Bove of Rafferty Capital Markets.

The lawsuits have focused on everything from conflict of interest in bank hiring practices in China to malfeasance in U.S. home foreclosures.

Already the aggressive legal action has led BNY Mellon to shift jobs to Bangalore, India, and Goldman Sachs to build its staff in New Jersey and Utah rather than New York City, Bove tells CNBC.

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"There used to be at least a dozen banks and brokerage firms that were headquartered in New York that were of great size. They're not there anymore," he said.

"And the ones that are left, they're pulling money and jobs out of New York, and why are they doing it? Well, one of the key reasons, you've had three attorney generals in a row, who just can't stop suing them."

To be sure, not everyone sides with the banks. "If you don't want to pay the fine, don't do the crime," Andrew Stoltmann, a securities litigator at Stoltmann Law Office, tells CNBC.

"The banks have nobody to blame except themselves and for them to be pointing the finger and saying, 'The regulators are beating us up, this is so unfortunate, we're going to elsewhere' — look, you have yourself to blame."

As for bank stocks, "the much-heralded improvements in the fortune of banks may be misleading," former banker Satyajit Das writes in an article for MarketWatch.

"Federal Reserve policies, especially low interest rates and large liquidity flows, . . . have supported bank earnings to a large degree. Low short-term policy rates act as a de-facto subsidy to banks."

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New York regulators are doing their best to push major banks out of the state by filing multiple lawsuits against them, says bank analyst Richard Bove of Rafferty Capital Markets.
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2014-48-12
Wednesday, 12 February 2014 08:48 AM
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