GSIB CEOs Testify on Bank Operations Post-Financial Crisis

The House Financial Services Committee (the "Committee") reviewed the post-financial crisis operations of seven of the eight global systemically important banks ("GSIBs"): Citigroup, JPMorgan Chase & Co., Morgan Stanley, Bank of America, State Street Corporation, the Bank of New York Mellon and Goldman Sachs. CEOs from each of these GSIBs testified.

According to a memorandum by the Committee's Majority Staff, GSIBs have over $11 trillion in combined assets, which comprise roughly 50 percent of domestic banking assets. They hold roughly $4.1 trillion in loans and supply over $700 billion in customer loans. Majority Staff noted that the GSIBs paid approximately $164 billion in fines since the financial crisis.

The CEOs testified that since the financial crisis:

• Citigroup became a "smaller, safer, stronger and far less complex" company;

• JPMorgan Chase & Co. expanded its business and philanthropic initiatives to make an impact at the local level and widened the "spectrum of clients and customers" that it serves;

• Morgan Stanley transformed its business model (i.e., it became a bank holding company in 2008 and set out on a strategy to "diversify the firm");

• Bank of America modified its company by focusing on principles set forth in the Dodd-Frank Act; and

• State Street Corporation became stronger, more resilient and "more nimble and responsive to emerging and new risks."

Further, the CEO of Goldman Sachs expressed confidence that the institution could withstand a significant market shock and the CEO of the Bank of New York Mellon committed to retaining the trust of regulators and the American public.