House Financial Services Committee members Reps. Alexandria Ocasio-Cortez and Rep. Jennifer Wexton during testimony from ex-Wells Fargo CEO Timothy Sloan last month. Photo: Chip Somodevilla/Getty Images
The CEOs of big U.S. banks will tout how their companies have transformed since the financial crisis at Wednesday's House Financial Services Committee hearing — and released testimonies show they'll say the system has become less risky thanks to regulations.
The backdrop: It's the first time the heads of America's biggest financial institutions will testify together since the aftermath of the 2007–2008 crisis. It's "part of an opening salvo in House Democrats' plans to examine the industry’s activities," as the Wall Street Journal points out, and comes amid heightened scrutiny of capitalism's effectiveness.
The highlights:
- "Since the crisis, Citi has become a smaller, safer, stronger and far less complex company. We have transformed our institution, not just in terms of capital, ... but also in terms of our controls, which include risk management, audit, and compliance," Michael Corbat, Citigroup's CEO, writes in prepared remarks.
- "We have significantly transformed Morgan Stanley over the last 10 years. We are now a safer and sounder financial institution focused on helping our clients finance economic growth, job creation, retirement security, college savings, and more," Morgan Stanley's CEO James Gorman will tell Congress.
- "Since 2009, we have devoted substantial resources across the firm to not only improve the resilience and resolvability of Goldman Sachs, but also to reduce complexity in our structure and make our firm more efficient," Goldman Sachs' CEO David Solomon, whose been at the helm of the bank for less than a year, will say.
- "Through regulatory reform efforts, we have fundamentally improved the safety and soundness of our financial system," JP Morgan CEO Jamie Dimon plans to say.
The message is similar to that being laid out by the Financial Services Forum — a trade group whose members, except Wells Fargo's interim CEO, are testifying.
- "[The testimony] is an opportunity for industry leaders and Members of Congress to take stock of the massive improvements to our nation’s financial stability," Kevin Fromer, president & CEO of the Financial Services Forum, wrote in a memo obtained by Axios.
According to a memo from the House Financial Services Committee, chaired by Rep. Maxine Waters: “A number of questions remain regarding whether America is being well-served by the largest and most systemically important banks, and whether there is appropriate accountability."