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As Republicans Claim Wall Street Reform Is Killing Banks, Bank Profits Hit Highest Level Since 2006

By Guest Contributor on February 28, 2012 at 1:00 pm

"As Republicans Claim Wall Street Reform Is Killing Banks, Bank Profits Hit Highest Level Since 2006"

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As House Republicans and the U.S. Chamber of Commerce team up for their latest assault on the Dodd-Frank financial reform law, specifically a rule reining in banks’ risky trading, the Federal Deposit Insurance Corporation (FDIC) has released its latest Quarterly Banking Profile, which shows that GOP claims regarding Dodd-Frank killing America’s banks have little truth behind them.

The release reports that FDIC-insured commercial banks and savings institutions earned $26.3 billion in profits at the end of last year — a figure that is up 23 percent from earnings reported in the final quarter of 2010 — making 2011′s fourth-quarter the most profitable period for the industry since 2006:

For the year, earnings hit $119.5 billion — the most since 2006.

Banks with assets exceeding $10 billion accounted for almost all of the earnings growth in the fourth quarter. While they make up just 1.4 percent of U.S. banks, they accounted for more than 81 percent of the earnings.

Those banks include Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. Most of them have recovered with help from federal bailout money and record-low borrowing rates.

Many of these same banks complained last year that new regulations mandated by Congress have hurt their ability to make money and moved to charge new fees to make up the difference
.

Clearly, the FDIC’s findings stand contrary to the GOP’s claims that the law “hinder[s] American markets, competitiveness and job creation” and is “killing the banking industry now.” In fact, the number of banks on the FDIC’s “problem list” declined 11 percent, from 844 to 813, while total loans and leases increased by $130.1 billion, as did insured deposit accounts, which increased by $249.7 billion during the quarter.

Fatima Najiy

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