Higher Bank Equity Is in the Public Interest
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March 4 (Bloomberg) -- In their important new book, “TheBankers’ New Clothes,” Anat Admati and Martin Hellwig challengea cherished belief of people who run big banks: Equity is“expensive” and requiring banks to fund themselves with moreequity (relative to their debts) will somehow slow the economy.
This is what we hear from top executives as their centralargument in the pushback against financial reforms. Jamie Dimon,the chief executive officer of JPMorgan Chase & Co., forexample, suggested last week: “I think all banks will have toomuch capital in two and a half years. And they’re not going toknow what to do with it.”