Former Fed Governor Kevin Warsh warns of the risks regulators and policymakers face by passing rules that turn financial institutions into public utilities.
Haven't you written a lot about how the impact that regulation a lot of -- -- -- -- on the entrepreneurial. Part of -- so you've worried about the creating utilities out of banks and that and banks being engines of credit in the economy. Being a bad thing I mean how do you see that shaping out. This year so I think the merger advisory businesses probably one of the few businesses that Washington isn't prepared to show up and tell them how to run the business of those businesses are safe. I would say broadly -- I'm concerned that coming out of Washington coming out of a lot of national capitals. There is a brand new financial architecture that is just finding its shape as we get through 2014. And it's likely to have very few firms as these guys described at the top of the pyramid. Then I worry very much overtime minutes probably happening in real time become public utilities. What do you call firms where compensation. And returns on capital and those businesses -- permitted to be in and not be in and continued regulation by a dozen institutions that are poorly coordinated would call those public utilities. And in the business that Tony and taller and talent doesn't often -- us today that the low and it levels are sending in a public utility. So this matters for Wall Street but I'm afraid it also matters for the real economy we've had 9000 banks in the US. For most of the post war era though there's been some consolidation. And isn't stark contrast the economy is virtually everywhere else in the world. Where they have had a public utility model think about the German banks the French banks Japanese and Chinese. I worry that we are moving in that direction. And in so doing credit innovation. Competing for products competing for customers is less bookmarks public utilities. So I'm not afraid of having big banks will we wanna have mature little small businesses and small banks be able to grow up and become big ones. And big banks that can fail. And all the sudden disappeared -- lose their market share. I wonder whether the banks of the top now decided and the government has decided. But they're going to be there for a very long time what the consequences are for credit to the real -- coming. They say that it's easier to manage and keep yours yours yours yours your foot on the neck of a few very big banks and make sure that they -- it. Is an easier regulatory structure to some degree then allowing. Great competition. Where you have socialized losses.