Charles Schwab: Banks need to reduce risk more aggressively

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-- -- -- Citibank customers are Citigroup Citicorp record ever view it depends on what region of the country your the world of what you call it but it's terribly different and it.

Leaving today abruptly that's upstate quit others say he was was bottom line he is gone.

This guy it was Davidson one -- of -- -- with -- money was taken charge right after the meltdown.

He wouldn't answer simple questions.

Finally at the -- in a very I asked him the Vanilla or chocolate.

And he's had the knowledge on what I have the knowledge I've realized it -- -- like Jesus world -- -- all I needed to know about Vikram Pandit.

Few years later he is toast and Charles Schwab says not a moment too soon.

I think -- probably time for that team to move on and they've had such a difficult time trying to.

Rearrange this massive enterprise Citicorp.

I think they need a fresh team sort of like what we might want to have coming up in November it it.

We're not like getting toward the political -- and that's pretty clever but you know is it just need.

Tells -- what's that.

-- -- change rather abrupt and like you know right up until you get to the altered couples the -- not there.

Well what happened of course I'm sure the board of directors.

Just -- -- up to Europe eyeballs and excuses why this thing isn't turning.

And they've had several years to do that work and when you have leadership that probably doesn't have a sixth sense about the business have banking.

It becomes an issue and and so I think it's time for a fresh start.

How much did the stock price weigh in on stuff like this president has gotten it to good use this is as the city situation might be unique but.

When it comes to battered stocks not entirely look at Bank of America look at a host of others several all part of that meltdown -- that came back but.

It -- if you look at this stock you would begin to wonder you know it could happen again they're just as vulnerable again.

Dodd-Frank notwithstanding.

Man a man there that there are hardly standing strong.

Well Neil I don't think there'd been building risk into their enterprise -- into their balance sheet -- think they've probably taken risk off the table used you do have more aggressively I think.

And get more oriented towards their clients.

As such and clean up the -- -- -- before and I think they've been well on the way but they use need to be accelerate.

Those kind of decisions.

There is -- that it is really your -- that Romney has talked about the whole city had -- law the dot Franken and and he's candidates' messages on Charles I wonder where you think he stands would he beat port torpedoing it's because of all the -- regulations and burdens.

Or fine tuning it.

-- I frankly think.

We in the financial service world believe we need appropriate kinds of regulations no question about that.

But when something like Dodd franks has been created.

Sort of been the mystery of night it is a huge document into -- weighs about ten pounds when I carried around.

And there's nothing really yeah on it.

And there's 200 more of regulations to come out on top of what is already been created it's created is massive and certainly for the banking world brokerage world and so forth.

And I think it needs to just be updated would've thought about how to make things more efficient.

-- yet to make sure our financial institutions.

Clearly are.

Of that pristine nature meaning that they have all the capital that is required and that's what simply happened frankly back in 2008.

These companies got to such high leverage that we just got to back to the -- -- -- -- in 2004.

For five or six.

Do you think it could happen again -- -- -- that is the idea is that this was made that.

Next to impossible.

What are you that -- frankly.

Don't believe the law even address the issues that we're.

We that created that is the big problem that was the excess leverage not only -- -- Private institutions.

Like Citicorp or Bear Stearns -- companies of that nature also by Freddie and Fannie those things got to.

Fifty.

Plus times capital ratios.

And I think we'll let you out of everything they -- that and everything completely outrageous right now.

Since you know when you're in a recent editorial in -- you had some accusing its president Al folks -- go about.

Choosing a candidate going back to how they affect or will will will potentially adversely affect business you talk about.

-- which candidate will review everybody the tax code and regulation to assess its relevance and complexity.

Whether it's.

-- -- -- law or now the new health care law the argument is way too much complexity.

Way too much it intricacies.

In the end way too much cost -- -- Well I say yes all of these -- regulations have built in cost fear of providing.

Credit to clients that might be on borderline.

You want banks.

To take some risk.

But intelligent risk.

And but right now we have a period of great fear of my business operators.

And so.

Our credit expansion and been very subdued.

Enhance our small businesses in America have not gotten the credit flows I don't think that it required to get our.

Or do you see any of that changing Charles you know you hear that it trickles of improvement -- more lending going on more businesses getting loans.

Consumers as well or is it.

-- this glacial.

It is happening and I think with maybe a change in the attitude.

Towards business that the fear factor will go away and more confidence will come back into our marketplace -- that's what I'm hopeful.

What do you put that that if Romney Bryant ticket I will elect I think right away the markets would respond businesses would -- -- just like it might look great recollection when.

When Reagan came in in 1980.

Was elected in the next on suing.

Bull market in.

This who's considered a very positive thing to have job creation followed.

It was a great time for American business given if you remember Charles they're great student -- history yourself when my dog -- there.

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- And I'm so wasn't instantaneous so would you say -- -- -- Bryant to get it -- -- -- got the best.

The results could be delayed in other words things get worse before they get better.

I don't think he'll get any worse they're pretty bad right now frankly I think but there will be time that'll it will take to.

Yet additional discipline and -- what we've been living on this credit card national debt.

And we've got to sort of stopped that as quickly as possible and now we'll take -- a slight adjustment.

Frankly they'll try to be a few government jobs it'll be trend in the process.

I think that's good but I think there will be other savings that will have.

That'll save.

For the government.

Monies that are being wasted right today.

-- I would say one other thing Neil Young on the Ronnie O'Brien ticket one of the things that I have been really upset about.

Here's how the older people the people who've saved 3040.

Years your savings accounts or CDs.

Or money market accounts.

Are being paid.

Near zero in terms of interest it cost this country.

And seniors about 250.

Billion dollars a year in lost income.

Further they lose it because -- principal gets impacted by inflation.

Even though it's only 2% per -- they've lost 8% in the last four years.

Sports deals and then you -- -- -- little inflation and credit to perk up now I don't know what you need to have -- -- you would sort of reveal what you need to have in order to get.

-- interest rates back to a normal level let's say a 3% on the savings account -- get the economy growing.

Three three and a half percent program that's how related.

Did at the big tax cuts around visitors and where you yes you need to have a pro business.

Administration.

Not a negative administration -- pro business and all the pro.

Business kind of considerations that will come in there are planning to install the sooners are elected.

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Charles Schwab: Banks need to reduce risk more aggressively

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