America’s banks are indeed safer and sounder than they were prior to the passage of Dodd-Frank five years ago this week. Nevertheless, it’s put them at a competitive disadvantage, said Ernie Patrikis, banking regulatory partner at White & Case. ‘Enhanced prudential supervision, those are the key words,’ said Patrikis. ‘Dealing with leverage, capital and other matters. It really puts constraints on banks that competitors don’t have. It’s remarkable they do as well as they can within that.’ Patrikis advises global banking and insurance clients on a range of U.S. regulatory issues and reforms for the international law firm, including implementation of the provisions of the Dodd-Frank Act, such as the Volcker Rule, enhanced prudential standards and resolution planning, and consumer financial protection issues. He is also currently president of the Center for Transnational Legal Studies, the body which publishes the treatise on Regulation of Foreign Banks and Affiliates in the United States. Regarding bank CEOs who have openly spoken out against the stricter regulatory standards, Patrikis said they are well within their right, despite the fact that the banks played a significant role in the 2008 financial crisis which led to government intervention. ‘I think bankers have to criticize and they have to do it more,’ said Patrikis. ‘When I first started practicing at the Fed maybe 45 years ago, banks used to sue the Fed. Today nobody dares. The Fed is too powerful. So they have to speak out. They have to go to the Hill. They are protecting themselves.’
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