The Big Bank Debate Continues
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By Patrick Sims, 202-822-1205, psims@hamiltonps.com
How do two influential figures who worked at the same bank, have drastically different views on the break-up-the-bank debate?
Yesterday, Former Treasury Secretary and Citigroup director Robert Rubin disagreed with Sandy Weill’s comments on breaking up the banks:
“I think that if you followed Sandy’s path and you broke up the banks in some fashion or other… The systemic risk, the too big to fail risk will move from one place to another place. For example, if you could curtail what the banks can do in terms of trading, it isn’t that the trading is going to go away. You have a large global economy that needs those activities but they’ll go to other platforms. I think the real question is, are there ways to deal with the risk?”
It is valuable to hear diverse arguments on the future of banking as different, and oftentimes clashing, perspectives continue to evolve. Contributing to this debate, HPS Insight released a report titled, “Banking on our …
Banking On Our Future: The Value of Big Banks in a Global Economy
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By Patrick Sims, 202-822-1205, psims@hamiltonps.com
As the debate over appropriate financial regulation continues, proposals to break up global financial institutions endure. Notably absent in these proposals, however, is an acknowledgment of the consequences a break up of large financial institutions would have on the U.S. economy. This HPS report examines the role the nation’s largest banks play in the global economy and the consequences U.S. businesses and consumers face if they are arbitrarily capped or broken apart.
Read the full report here.
Our analysis of the value of large financial institutions concludes that:
- U.S. banks are already smaller and safer than their global competitors;
- The loan syndication market is no substitute for big, global banks;
- In the event of a break up, the global competitive landscape will rebalance in favor of foreign banks and the shadow banking sector; and
- Ultimately, breaking up U.S. banks will not improve the safety of the global financial sector and would reduce U.S. influence over the financial sector globally.
Immigration Policy Through The Lens of Economic Growth
On Monday, Senate Republicans and Democrats released a bi-partisan comprehensive immigration reform proposal and on Tuesday President Barack Obama outlined his priorities in Nevada. As Washington debates various pieces of reform of our immigration system, this HPS report examines our current policy from the perspective of economic growth to determine whether the U.S. fully capitalizes on the economic benefits of immigrants.
Read the full report here.
Shift the framework on immigration from supply and demand to economic growth: Rather than view immigrants as labor market competitors, we offer a different framework that looks at immigrants’ impact on the two components of economic growth: population and productivity. We find immigrants have positive effects on both sides and thus are critical to boosting economic growth in the face of U.S. demographic challenges.
Current policy does not fully capitalize on the economic benefits of immigrants: Under our current system, market demand far outstrips the caps on high-skilled and low-skilled immigration. Moreover, the legal permanent resident visas are designed to unite families rather than recruit workers. …
Size of Government: A Perspective on the Fundamental Washington Divide
by Matt McDonald, mmcdonald@hamiltonps.com, and Robert Terra, rterra@hamiltonps.com, 202-822-1205.
Read the full report here (right click, save as to download the .pdf).
President Obama’s second inaugural address made a forceful defense of government’s role in our lives and our economy. It was met with an equally vocal opposition arguing for a limited state. The moment was illustrative of the current debate focused on intangible criteria of more vs. less instead of attempting to achieve specific goals or benchmarks. As we return to a “normal” budget process, this paper looks at what potential goals could look like and offers some frameworks for thinking about the “right” size of government.
- Optimal Growth: One way to evaluate government spending is through the lens of economic growth. A robust economy can lead to greater wealth, higher employment rates, better standards of living, and a host of other benefits that people value.
- Social Responsibility: Gauging the size of government based on economic growth alone may be a logical exercise, but it does not account for the
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Fratto on CNBC: US Economy Strong Enough to Cope
Fratto on Ideas Lab: Achieving ‘Resilient Dynamism’
Published at Ideas Lab, Tuesday December 11, 2012
By: Tony Fratto, 202-822-1205, tfratto@hamiltonps.com
The former U.S. Treasury and White House official previews the main themes of this week’s World Economic Forum in Davos.
The theme of this year’s World Economic Forum is “Resilient Dynamism.” Klaus Schwab, its founder and executive chairman, describes this current period we’re facing as one where “the interconnectivity, the velocity of the global system represents ever increasing systemic risks.”
The WEF’s Global Agenda Outlook 2013 shows the top three issues members of the Network of Global Agenda Councils deem most urgent all involve instability: unstable global economy, Eurozone fragility and financial system instability. This instability in the global economy is having a direct impact on the perception of innovation. It’s clear the goal over the next four days is to identify what actions can be taken by academia, business, civil society, government and international organizations to help bring about a successful future.
But where to start? Leaders should begin by looking at one of the most important parts of economic …
Fratto on CNBC – Time to Remake the GOP
HPS Announces Robert Terra as Managing Director
Washington, DC – Hamilton Place Strategies is pleased to announce the addition of Robert Terra as a managing director. Terra will be serving clients in both the communications and policy practices of HPS. Additionally, Terra will be joining the leadership of HPS’ Crisis Communications practice, drawing on years of experience managing campaign war rooms to bring political rapid response capabilities to HPS clients.
Prior to joining HPS, Terra worked as Director of Strategic Initiatives for Governor Mitt Romney’s Presidential campaign. Earlier in his career, Terra worked for Governor Arnold Schwarzenegger as Deputy Press Secretary and Communications Director of the Governor’s DC office. Additionally, he managed the war rooms for Governor Schwarzenegger’s 2006 reelection campaign and Senator John McCain’s 2008 Presidential campaign. As part of his work with clients at HPS, Terra will be deploying and implementing these same rapid response tactics.
“We are excited to have Rob join Hamilton Place Strategies,” said Managing Partner Tony Fratto. “His extensive experience in rapid response and seasoned communications and analytical skills make him an extremely valuable asset to …