Break Up the Big Banks? Corporate America Weighs In
August 22, 2012 12:26 PM
(Image: Shutterstock )
The Banks' Defense
"We can do $5 billion revolvers or raise money for America's Fortune 100 companies in a day or two when they needed to do something. …These are services they need." - Jamie Dimon, chief executive of JPMorgan Chase (Image: Bloomberg News)
Lackluster Support
"Is it going to have a material detrimental impact on corporate America if [the big banks] were broken up? I doubt that." -- Jeff A. Glenzer, who oversees public policy for the Association for Financial Professionals , a trade group.
Convenience and Creativity
"I do like the big banks. They have the most creative folks, they have the resources to do stuff that small banks cannot afford to do," but if they were to be broken up, "we'd manage." - Treasurer for a Fortune 100 company who was not authorized to speak on the record. (Image: Shutterstock )
Looking for Options
Big business has other options for financing. Bank loans to large companies have declined as a percentage of their total borrowing over the past few decades as corporations have turned to the bond markets, according to Federal Reserve data.
Relationship Downsides
"There's been a trend of banks making credit commitments as part of an overall decision on the profitability of a client. That includes a mix of credit business and fee-generating business," says Thomas C. Deas, Jr., the treasurer of chemical company FMC Corp. (FMC) and the chairman of the National Association of Corporate Treasurers , a trade group.
Relationship Upsides
"Treasurers of U.S.-based multinationals rely on large banks able to provide global services and credit support around the world." - Tom Deas. (Image: Shutterstock )
Cheaper Credit
Dealing with the biggest banks "can equate to a cheaper loan, if you have a warehouse line of credit or something that has been facilitated by a larger loan." — Kevin Petrasic, a partner in the global banking and payments practice of Paul, Hastings, Janofsky & Walker.
Strings Attached
"Some companies feel as if, when it comes time to needing to do something that's important that requires the support of a financial institution, their options are limited." - Jim Simpson, a consultant at Debt Compliance Services and a former corporate financial executive at several companies.
Lukewarm Endorsement
"We have a very strong group of banks that support our global business." - Caterpillar spokesman, when asked to comment about the "huge benefits" that Dimon says JPMorgan Chase provides it. (Image: Shutterstock )
