Companies Back Bank Crackdown

Companies support tougher rules on large U.S. banks, even though it may cost them money.
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NEW YORK (

TheStreet

) -- U.S. companies show strong support for tougher restrictions on big U.S. banks like

Citigroup

(C) - Get Report

,

Bank of America

(BAC) - Get Report

,

Wells Fargo

(WFC) - Get Report

,

JP Morgan Chase

(JPM) - Get Report

and

Goldman Sachs

(GS) - Get Report

, according to a survey released Monday by Greenwich Associates, a financial services consulting firm.

Though it's possible to conduct a survey to say pretty much anything you want, Greenwich would not appear to have any reason to push an anti-Wall Street agenda since many of its clients are Wall Street firms. Greenwich surveyed 58 CFOs, treasurers and assistant treasurers in conducting its survey over the Internet.

Fifty percent of the companies surveyed said they support the elimination of proprietary trading and limits on banks' ability to invest in hedge funds and private equity. Reform legislation working its way through the Senate would create a commission to study the feasibility of such measures, which have become known as the "Volker Rule." Only 10% of the companies surveyed oppose such measures.

Maybe more surprising is that an even larger percentage of companies -- some 65% -- support requiring banks to hold more capital in reserve, even though that might result in higher funding costs for companies. Fewer than 5% of the companies Greenwich surveyed were opposed to higher capital requirements.

Companies were more cautious, however, when it came to having a single government regulator with the power to limit the size of company deemed too big to fail. Thirty four percent of respondents favored such a proposal, while an equal number opposed such a move.

--

Written by Dan Freed in New York

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