Bank executives warned House lawmakers that their institutions are losing ground to lenders facing less stringent regulation, particularly requirements that they keep a minimum amount of capital to cover losses.
Executives from seven of the largest banks in the U.S. testified Wednesday before the House Financial Services Committee and told lawmakers capital requirements raise the costs of loans, depress their lending and could have negative consequences in a recession.
“When you think about the economy and where it goes to create risk versus leverage, honestly, there’s more of that outside the banking system than inside,” said Brian Moynihan, CEO of Bank of America. He said nonbank lenders have too little capital on hand relative to the lending they’re doing.
