Mohamed El-Erian Sees Disruption Threat, Shrinkage for Big Banks

Big banks like Citigroup, JPMorgan Chase, Bank of America and Wells Fargo face possible disruption from new technologies, says Allianz Chief Economic Adviser Mohamed El-Erian. The longtime money management executive believes markets and regulators will force big banks to shrink, though he sees some dangers as risks build up in non-banking institutions such as mortgage REITs and private equity firms. Another drawback he sees to the big banks shrinking is less efficiency in terms of the provision of financial services. Nonetheless, El-Erian believes most Americans will continue to be served by the big four banks for some time to come. His remarks came at the Global Financial Leadership Conference in Naples, Fla.