Too Big to Fail & Systemic Risk (Including Systemic Risk)

The Wall Street financial crisis and government intervention of 2008 affirmed that the nation’s largest megabanks are “too big to fail”—so big and interconnected that the government will not allow them to fail.

As ICBA details in its “End Too-Big-To-Fail” study, too-big-to-fail distorts free markets, incentivizes risky behavior, leaves taxpayers on the hook, and creates unfair competitive advantages for the largest banks. Meanwhile, community banks face oppressive regulatory burdens as a direct result of megabank misdeeds.

A less concentrated and more diverse financial system would decrease systemic risk, improve competition and innovation, and increase the availability of consumer credit. ICBA and the nation’s community banks are dedicated to ending too-big-to-fail.

Articles & Press Releases

Community Banks Are the Megabank Alternative

Apr 10, 2019
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Washington, D.C. (April 10, 2019)—Independent Community Bankers of America® (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on today’s House Financial Services Committee hearing on holding megabanks accountable.

“As Congress reviews the state of the nation’s largest and riskiest banks a decade after the Wall Street financial crisis they caused, ICBA is reminding policymakers of the positive role community banks serve in their local communities.

“Community banks comprise 99 percent of U.S. bank charters and make 60 percent of the nation’s small-business loans and 80 percent of agricultural loans. And these locally based institutions continue to find new ways to spread economic prosperity throughout their communities, adding more than 700 bank offices between June 2017 and June 2018 while larger institutions shrank their office footprint. Through it all, community banks operate within the strenuous regulatory requirements and economic fallout often provoked by the misbehavior of the megabanks.

“The community bank dedication to bipartisan economic principles that expand access to financial services shines through in ICBA’s policy platform, Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity. Community Focus 2020 includes specific, common-sense recommendations developed by community bankers to support a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more effective agriculture policies.

“As the only physical banking presence for one in five U.S. counties, community banks continue to serve a vital and unmatched role in meeting the needs of local customers and communities nationwide. With more than 52,000 locations and a presence in every congressional district, community banks reflect America’s diversity and offer a source of common ground for Republicans and Democrats.

“ICBA and the nation’s community banks look forward to continuing to work with policymakers on common-sense reforms that will help these local institutions promote greater access to financial services and economic opportunity throughout every corner of the country.”

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 52,000 locations nationwide, community banks constitute 99 percent of all banks, employ more than 760,000 Americans and are the only physical banking presence in one in five U.S. counties. Holding more than $4.9 trillion in assets, $3.9 trillion in deposits, and $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org

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Letters to Congress

Title Recipient Date
Senators Crapo and Brown
09/12/2017

Letters to Regulators

Title Recipient Date
Federal Reserve, OCC
06/12/2018
Federal Reserve, OCC
05/08/2018
Federal Reserve Bank of Minneapolis
01/17/2017
OCC, Federal Reserve, and FDIC
08/03/2016

Testimonies

Title Committee Presenter Date

Summaries

Title Content Type Date