The bevy of regulation since the 2008 financial crisis has weakened the banking sector to the point that another meltdown is inevitable, says private equity star J. Christopher Flowers, CEO of J.C. Flowers.
"All the stuff that has happened, and all the rules we’ve introduced have depressed profitability. And that is a real vulnerability," he tells the
Financial Times. "Nobody is going to invest in an industry with returns of 5 percent."
While Flowers has invested in banks in the United States, United Kingdom, Japan, Germany and the Netherlands, he notes, regulators are engaged in a fool's errand in trying to eliminate risk from the banking industry.
Editor’s Note: 5 Shocking Reasons the Dow Will Hit 60,000
"How do you make something that lends money at risk a utility?" Flowers asks rhetorically.
"That you could design this so that there would never be another banking crisis again is a utopian idea. I guarantee that we will have another banking crisis."
In the United States, the Dodd-Frank financial reform law of 2010 has drawn the ire of many, particularly bankers themselves and Republicans in Congress.
Regulators haven't even finished important parts of the law yet, including new rules for the mortgage-securities market and stronger guidelines for credit-rating companies,
The Wall Street Journal reports.
"It's disappointing," Sheila Bair, who headed the Federal Deposit Insurance Corp. during the financial crisis, tells the paper. "Pretty big chunks haven't been finished. All the regulators are further behind than I thought they would be."
Editor’s Note: 5 Shocking Reasons the Dow Will Hit 60,000
© 2026 Newsmax Finance. All rights reserved.