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Thomas Hoenig

Safe banks need not mean slow economic growth

"Before 2007, the owners of America's largest banks contributed as little as three cents of common equity for every dollar on their balance sheets. The capital requirements in place at the time were little constraint on the use of debt by these banks to fund purchases. Given the devastating effect of the financial crisis on US jobs and wealth that followed, would anyone really want to argue that requiring the biggest banks to hold more equity in 2007 would have adversely affected economic growth?

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