The U.S. needs more big banks, not less, if it is going to remain a world power and avoid the fate of some debt-laden European countries, analyst Dick Bove said.
In his latest broadside against efforts to split up the nation's largest financial institutions, Bove said the dollar is at risk of losing its standing as the world's reserve currency. That would mean foreign creditors could demand that the nation pay its more than $15 trillion of outstanding public debt immediately.
Conversely, growing the banking system and unleashing big institutions "to use the tools they have developed" will protect American financial interests globally.
"In doing so, the biggest American banks will aid the growth of the American economy and protect American prosperity," said Bove, the vice president of equity research at Rochdale Securities. "The problem is the United States does not want this. It is shrinking its big banks.
"It is using every political technique it can muster to reduce their profits and profitability. It is on a vendetta to curtail banking activity."
Indeed, the drumbeat has intensified to break up the so-called too-big-to-fail institutions that helped precipitate the financial crisis and necessitated a massive federal bailout.Page 1 of 4 | Next Page